Analysis of agribusiness value chains servicing small-holder dairy farming communities in Punjab, Pakistan

Three case studies

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Abstract

The agriculture sector in Pakistan, as in most developing countries, is dominated by smallholder producers. Pakistan has the world’s third largest dairy industry, and milk is efficiently collected and distributed chiefly by informal value chains that market the raw product with minimal cool chain infrastructure. Formal processors have a small market share of 5%. Interview data from farmers, milk collectors and consumers from three rural-urban case study value chains were analysed to study opportunities and challenges faced by the dairy industry. Compositional analysis of milk samples (n=84) collected along these chains identified the fact that in Pakistan informal milk chains provide a cheaper source of calories for the final consumer than industrialised milk chains (USD 0.12 compared USD 0.15 per 100 calories). These three chains created an
estimated 4,872 jobs from farm to market and provided access to interest-free credit for the farmers. The existing government price setting mechanism at the retail end and collusion by large processors to set farm
gate prices provided significant limitations to the profitability of small-holder farms providing the product. The absence of quality and quantity standards, amid the exchange of huge numbers of small volumes of
milk along these chains, are major impediments to industry growth.
Original languageEnglish
Pages (from-to)119-136
Number of pages18
JournalInternational Food and Agribusiness Management Review
Volume22
Issue number1
Early online date24 Oct 2018
DOIs
Publication statusPublished - 2019

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agribusiness
Pakistan
supply chain
Agriculture
dairy farming
Milk
case studies
Dairying
milk
dairy industry
developing countries
farmers
markets
milk analysis
market share
small farms
credit
collectors
agricultural products
infrastructure

Cite this

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title = "Analysis of agribusiness value chains servicing small-holder dairy farming communities in Punjab, Pakistan: Three case studies",
abstract = "The agriculture sector in Pakistan, as in most developing countries, is dominated by smallholder producers. Pakistan has the world’s third largest dairy industry, and milk is efficiently collected and distributed chiefly by informal value chains that market the raw product with minimal cool chain infrastructure. Formal processors have a small market share of 5{\%}. Interview data from farmers, milk collectors and consumers from three rural-urban case study value chains were analysed to study opportunities and challenges faced by the dairy industry. Compositional analysis of milk samples (n=84) collected along these chains identified the fact that in Pakistan informal milk chains provide a cheaper source of calories for the final consumer than industrialised milk chains (USD 0.12 compared USD 0.15 per 100 calories). These three chains created anestimated 4,872 jobs from farm to market and provided access to interest-free credit for the farmers. The existing government price setting mechanism at the retail end and collusion by large processors to set farmgate prices provided significant limitations to the profitability of small-holder farms providing the product. The absence of quality and quantity standards, amid the exchange of huge numbers of small volumes ofmilk along these chains, are major impediments to industry growth.",
keywords = "value chain, milk, nutrition, price, pro-poor policy",
author = "Sosheel Godfrey and Gavin Ramsay and Karl Behrendt and Peter Wynn and Thomas Nordblom and Naveed Aslam",
year = "2019",
doi = "10.22434/IFAMR2017.0122",
language = "English",
volume = "22",
pages = "119--136",
journal = "International Food and Agribusiness Management Review",
issn = "1096-7508",
publisher = "International Food and Agribusiness Management Association",
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}

TY - JOUR

T1 - Analysis of agribusiness value chains servicing small-holder dairy farming communities in Punjab, Pakistan

T2 - Three case studies

AU - Godfrey, Sosheel

AU - Ramsay, Gavin

AU - Behrendt, Karl

AU - Wynn, Peter

AU - Nordblom, Thomas

AU - Aslam, Naveed

PY - 2019

Y1 - 2019

N2 - The agriculture sector in Pakistan, as in most developing countries, is dominated by smallholder producers. Pakistan has the world’s third largest dairy industry, and milk is efficiently collected and distributed chiefly by informal value chains that market the raw product with minimal cool chain infrastructure. Formal processors have a small market share of 5%. Interview data from farmers, milk collectors and consumers from three rural-urban case study value chains were analysed to study opportunities and challenges faced by the dairy industry. Compositional analysis of milk samples (n=84) collected along these chains identified the fact that in Pakistan informal milk chains provide a cheaper source of calories for the final consumer than industrialised milk chains (USD 0.12 compared USD 0.15 per 100 calories). These three chains created anestimated 4,872 jobs from farm to market and provided access to interest-free credit for the farmers. The existing government price setting mechanism at the retail end and collusion by large processors to set farmgate prices provided significant limitations to the profitability of small-holder farms providing the product. The absence of quality and quantity standards, amid the exchange of huge numbers of small volumes ofmilk along these chains, are major impediments to industry growth.

AB - The agriculture sector in Pakistan, as in most developing countries, is dominated by smallholder producers. Pakistan has the world’s third largest dairy industry, and milk is efficiently collected and distributed chiefly by informal value chains that market the raw product with minimal cool chain infrastructure. Formal processors have a small market share of 5%. Interview data from farmers, milk collectors and consumers from three rural-urban case study value chains were analysed to study opportunities and challenges faced by the dairy industry. Compositional analysis of milk samples (n=84) collected along these chains identified the fact that in Pakistan informal milk chains provide a cheaper source of calories for the final consumer than industrialised milk chains (USD 0.12 compared USD 0.15 per 100 calories). These three chains created anestimated 4,872 jobs from farm to market and provided access to interest-free credit for the farmers. The existing government price setting mechanism at the retail end and collusion by large processors to set farmgate prices provided significant limitations to the profitability of small-holder farms providing the product. The absence of quality and quantity standards, amid the exchange of huge numbers of small volumes ofmilk along these chains, are major impediments to industry growth.

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SN - 1096-7508

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