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Marketing, cooperatives and price heterogeneity: evidence from the CIS dairy sector

  • Johannes Sauer
  • Matthew Gorton
  • John White

Drawing on survey data, this paper identifies the determinants of variations in farm gate milk prices for three CIS countries (Armenia, Moldova and Ukraine). We apply a multi-level modeling approach, specifically a bootstrapped and selectivity bias corrected mixed-effects linear regression model. The analysis suggests three main strategies for farmers to improve the price received for their output: consolidation, cooperation and stable supply chain relationships. While selling through a marketing cooperative has a significant and positive effect on farm gate milk prices, the majority of non-members are reluctant to join. The size of dairy operations, trust and contracting also impact positively on the prices received by farmers. Policy implications are drawn.

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Article provided by International Association of Agricultural Economists in its journal Agricultural Economics.

Volume (Year): 43 (2012)
Issue (Month): 2 (03)
Pages: 165-177

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Handle: RePEc:bla:agecon:v:43:y:2012:i:2:p:165-177
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