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Does Access to Modern Marketing Channels Improve Dairy Enterprises’ Efficiency? A Case Study of Punjab, Pakistan

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  • Sana Sadaf

    ()

  • Khalid Riaz

    () (Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad, Pakistan.)

Abstract

The main objective of this study is to investigate how access to modern marketing channels impacts the efficiency of dairy enterprises. Using data on dairy farms in central Punjab (Sargodha), we carry out a nonparametric data envelopment analysis to measure their technical and scale efficiencies. The results show that, for the sample dairy enterprises, the mean technical efficiency under variable returns to scale was 0.89 while scale efficiency was 0.94. The results of a follow-on regression analysis support the hypothesis that the access to modern marketing channels, where payment for fresh milk is based on measured milk quality (fat content), improved efficiency. We find that efficiency is positively affected by the size of dairy operations, and negatively by the size of operational land area. Moreover, dairy enterprises with smaller herds tend to operate at a suboptimal scale, possibly due to credit and/or land constraints.

Suggested Citation

  • Sana Sadaf & Khalid Riaz, 2012. "Does Access to Modern Marketing Channels Improve Dairy Enterprises’ Efficiency? A Case Study of Punjab, Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 17(1), pages 63-82, Jan-June.
  • Handle: RePEc:lje:journl:v:17:y:2012:i:1:p:63-82
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    References listed on IDEAS

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    1. Finn Førsund & Nikias Sarafoglou, 2002. "On the Origins of Data Envelopment Analysis," Journal of Productivity Analysis, Springer, vol. 17(1), pages 23-40, January.
    2. Basanta R. Dhungana & Peter L. Nuthall & Gilbert V. Nartea, 2004. "Measuring the economic inefficiency of Nepalese rice farms using data envelopment analysis," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 48(2), pages 347-369, June.
    3. Wossink, Ada & Denaux, Zulal S., 2006. "Environmental and cost efficiency of pesticide use in transgenic and conventional cotton production," Agricultural Systems, Elsevier, vol. 90(1-3), pages 312-328, October.
    4. Abid A. Burki & Mushtaq A. Khan, 2008. "Milk Supply Chain and Efficiency of Smallholder Dairy Producers in Pakistan," Microeconomics Working Papers 22252, East Asian Bureau of Economic Research.
    5. Tim Coelli & Sanzidur Rahman & Colin Thirtle, 2002. "Technical, Allocative, Cost and Scale Efficiencies in Bangladesh Rice Cultivation: A Non-parametric Approach," Journal of Agricultural Economics, Wiley Blackwell, vol. 53(3), pages 607-626.
    6. Jaforullah, Mohammad & Whiteman, John, 1999. "Scale efficiency in the New Zealand dairy industry: a non-parametric approach," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 43(4), December.
    7. R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
    8. Mohammad Pervez Wasim, 2005. "Milk Production Response in Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 10(1), pages 105-121, Jan-Jun.
    9. Rios, Ana R. & Shively, Gerald E., 2005. "Farm size and nonparametric efficiency measurements for coffee farms in Vietnam," 2005 Annual meeting, July 24-27, Providence, RI 19159, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
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    Cited by:

    1. Revoredo-Giha, Cesar & Akaichi, Faical & Arakelyan, Irina & Barnes, Andrew & Chagunda, Mizeck & Chalmers, Neil & Chitika, Rollins & Jumbe, Charles & Leat, Philip & Moran, Dominic & Thompson, Steven & , 2015. "Identifying Barriers for the Development of the Dairy Supply Chain in Malawi," 2015 Conference, August 9-14, 2015, Milan, Italy 212296, International Association of Agricultural Economists.

    More about this item

    Keywords

    Dairy; marketing; Punjab; Pakistan.;

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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