Low Price of Fresh Milk and its Implications in Peruvian Family Farming

Abstract

The dairy activity in Peru is being affected by the low prices in the purchase of fresh milk, discouraging the producers of family agriculture, which has forced them to take a position of social struggle and sell head of cattle to continue sustaining the family economy. This situation directly affects the main producing areas, located within the dairy basin of the departments of Cajamarca, Arequipa, and Lima, which represents 51.7% of the national production of fresh milk that is collected by three large dairy companies and formal and informal artisanal processors. The different purchase and sale channels have generated vulnerability in the price that small and medium producers receive today for fresh milk, which in the last ten years has been lower than international prices. Moreover, the industry is under a tax regulatory framework that has given it market advantages, generating disparity in terms of the benefits of Peruvian dairy producers in addition to the structural limitations that do not allow improving their performance. Therefore, it is expected and recommended that the Peruvian government fulfill a regulatory and articulating role within the system, generating policies, plans, workshops, among others, in order to improve the articulation and performance of the system for the benefit of families that call for state intervention to improve their living conditions and economic stability.