Impact of traditional versus modern dairy value chains on food security: Evidence from India’s dairy sector

Abstract

The Indian government has made significant efforts to promote dairy cooperatives to link the milk producers with consumers. Despite this, milk marketing is still dominated by traditional outlets. This paper examines the impact of modern dairy value chains on food security indicators such as net returns from dairying and consumption expenditures. Using a large, national, farm-level dataset from India and a multinomial endogenous switching regression model, results reveal that Indian dairy farmers’ integration with the modern dairy value chain has a positive and significant impact on their food security (measured by net returns and household consumption expenditures). Participation in modern milk-marketing outlets significantly increases net returns per year, regardless of whether farmers choose one outlet or a combination.