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Keywords:

  • O13;
  • P32;
  • Q13
  • Price heterogeneity;
  • Milk;
  • Cooperatives;
  • Armenia;
  • Moldova;
  • Ukraine

Abstract

Drawing on survey data, this article identifies the determinants of variations in farm gate milk prices for three CIS countries (Armenia, Moldova, and Ukraine). We apply a multi-level modeling approach, specifically a bootstrapped mixed-effects linear regression model. The analysis suggests three main strategies to improve the price received by farmers for their output: consolidation, competition for output, and stable supply chain relationships. In Armenia and Ukraine selling through a marketing cooperative has a significant, positive, albeit modest, effect on farm gate milk prices. In all three countries studied, the size of dairy operations, trust, and contracting also affect positively the prices received by farmers.