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Marketing, cooperatives and price heterogeneity: evidence from the CIS dairy sector

Authors

  • Johannes Sauer,

    Corresponding author
    1. Department of Economics, University of Manchester, Manchester, M13 9PL, United Kingdom
    2. Institute for Agricultural Economics, University of Kiel, Olshausenstrasse 40, 24103 Kiel, Germany
      Tel.: +49-(0)431-880-1513; fax: +49-(0)431-880-4421. E-mail address: jsauer@ae.uni-kiel.de (J. Sauer).
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  • Matthew Gorton,

    1. Newcastle University Business School, 5 Barrack Road, Newcastle upon Tyne, NE1 4SE, United Kingdom
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  • John White

    1. School of Management, University of Plymouth Business School, Plymouth, Devon, PL4 8AA, United Kingdom
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Tel.: +49-(0)431-880-1513; fax: +49-(0)431-880-4421. E-mail address: jsauer@ae.uni-kiel.de (J. Sauer).

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.

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