Producer behaviour,market structure and technology in Indian dairy industry: Some managerial implications |
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| Authors: | Tushaar Shah |
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| Institution: | Institute of Rural Management, P.O. Box 60, Anand 388001, India |
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| Abstract: | In a competitive agricultural commodity market, a parity can be expected between the prices of the raw materials and the prices of the final products. This paper attempts to show that such a parity does not exist between the price of liquid milk and the prices of milk fat and SNF in the forms in which they are produced in India, because the traditional milk producers do not have access to a technology that enables them to convert the SNF contained in their milk into products which have ready markets.This fact has given the modern dairy co-operatives of the rural milk producers a significant economic advantage in their competition with the traditional producers, since they have been able to give their members access to such a technology.This paper argues that the new, developing dairy co-operatives should devise their long-term strategies with a view to exploiting this economic advantage while it exists; for, in the long run, this advantage must disappear as competition among the dairy co-operatives in the markets for liquid milk and milk products increases. |
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