Economic Impact of Milk Marketing Channel Choices Among Dairy Farmers in India: Evidence from NSSO Data

This study examines the determinants of farmers’ selection of milk marketing channels and evaluates the economic implications of their choices in rural India. Utilizing unit-level data from the 77th round (2018–2019) of the National Sample Survey Office (NSSO) survey, our analysis reveals that farmers’ choice of marketing channel is significantly influenced by socio-economic factors such as social category, landholding size, per capita expenditure and marketed surplus. A multinomial logit regression results show that, typically, income is higher from buffalo milk than from cattle milk across different channels. Further, using regression adjustment for multi-valued treatment-effect analysis, the study highlights that affiliations with cooperatives and private processors can lead to income increases of, respectively, approximately 49% and 29% compared to direct sales to other households. These findings emphasize the benefits of organized marketing systems and showcase the economic advantages of strategic channel selection in enhancing farmers’ livelihoods in the dairy sector. JEL Classification: Q12, Q13, D7, M31