Quality and Price Variation in the Dairy Value Chian: A Case Study in &lt;em&gt;Monaragala&lt;/em&gt; District, Sri Lanka

P S S L Wickrama,V S Jayamanne,A L Sandika

doi:10.4038/sljae.v2i2.43

Abstract

Low value addition, quality and price variations have been recognized as common problems of value chains in developing countries. Objective of the present study was to examine the quality and price variations throughout the dairy value chain in a less developed region in Sri Lanka. Wellawaya divisional secretariat of Monaragala district was purposively selected as the study area. Primary data were collected by using pre-tested, structured questionnaires. Laboratory tests of milk and curd samples were carried out to check the quality variation using standard methods. Milk samples were collected from three levels including farmer (10), processor (10 from each, milk and curd) and retailer (10) to determine the quality variation. According to the results, price of curd and yoghurt at consumer level was increased by 36% and 77% compared to the farm gate price. Farmer received the highest profit per liter of milk (68.00 LKR) in the shortest value chain (D) out of four main chains identified. The markets’ margin was estimated at 36%. Farmer had the largest share of 64% followed by processor (20%), retailer (8%), collector (4%), and wholesaler (4%). It was evident that farmers received fair profit through all four dairy value chains. However, solid non-fat percentage, specific gravity and pH of analyzed samples through the value chain were not comply with the standards. In conclusion, the prices of dairy products have increased while deteriorating the quality along the chain. It is therefore important to educate and train actors throughout the dairy value chain on quality management.

Highlights

Value chain defines as a set of activities that a firm operating in a specific industry performs to deliver valuable products (Porter 1985)
Farmers, dairy collectors, processors, marketers and consumers were the main actors who engaged in dairy value chain in Wellawaya Divisional Secretariat (DS) division
Value chain management of dairy and dairy products is important because it describes how the activities are organized from farmer to consumer

Summary

Introduction

Value chain defines as a set of activities that a firm operating in a specific industry performs to deliver valuable products (Porter 1985). Different value chain actors can be identified such as input suppliers, milk producers, milk processors, marketers (wholesalers and retailers), and consumers. It includes different value-added products such as curd, yoghurt, pasteurized milk, and ice cream. The utilization of dairy and dairy items is common in Sri Lanka which is perishable Due to their perishable nature, there is a greater chance for quality deterioration from product conception to utilization affecting the buyer wellbeing. Enhancing product quality and safety through arrangement of good hygienic operations are desirable for customers. The development of infrastructure such as milk collecting networks, facilities for value addition, processing, and quality assurance remain as challenges for smooth growth of the industry

Objectives

Methods

Conclusion