Food Consumption Pattern and Demand Projection in Gujarat with Special Focus on Milk

The study analyzed the food consumption patterns among rural and urban households in Gujarat. The elasticities were estimated using the three stages of the Quadratic Almost Ideal Demand System (QUAIDS) for food grains, milk, edible oil, vegetables and fruits. Demand forecasting was performed specifically for milk. Demand was projected on a year-on-year basis from 2011 to 2036. The results revealed that the quantity and expenditure of milk were found to be higher in both rural and urban areas of Gujarat in 2011. Expenditure elasticities showed that milk and fruits were highly elastic commodities among the food groups. In the case of own price elasticities, uncompensated and compensated price elasticities were negative for the food group and highly negative for milk and fruits. In the case of uncompensated cross-price elasticities, milk was complementary with all food group items. In contrast, in compensated cross-price elasticities, milk was substituted with fruits and complementary with all other food items. The total demand for milk would be 23.24, 36.52 and 59.76 million tonnes for rural, urban and overall Gujarat, respectively, under the Business-as-usual (BAU) income growth scenario by the year 2036, which was increased from 3.47, 3.16 and 6.63 million tonnes in the base year 2011.