Formal versus informal: Efficiency, inclusiveness, and financing of dairy value chains in India
Despite a growing dairy industry in India, farmers’ lack of access to organized markets and institutional credit remains one of the major hindrances in improving the scale and productivity of dairying. Using data from a survey of 612 households from the state of Punjab, India, this paper evaluates f...
| Main Authors: | , , , , , , , |
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| Format: | Artículo preliminar |
| Language: | Inglés |
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International Food Policy Research Institute
2016
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| Subjects: | |
| Online Access: | https://hdl.handle.net/10568/147674 |
| _version_ | 1855535943177469952 |
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| author | Chand, Ramesh Joshi, Pramod Kumar Saxena, Raka Rajkhowa, Pallavi Khan, Md. Tajuddin Khan, Mohd. Arshad Chaudhary, Khyali R. Birthal, Pratap Singh |
| author_browse | Birthal, Pratap Singh Chand, Ramesh Chaudhary, Khyali R. Joshi, Pramod Kumar Khan, Md. Tajuddin Khan, Mohd. Arshad Rajkhowa, Pallavi Saxena, Raka |
| author_facet | Chand, Ramesh Joshi, Pramod Kumar Saxena, Raka Rajkhowa, Pallavi Khan, Md. Tajuddin Khan, Mohd. Arshad Chaudhary, Khyali R. Birthal, Pratap Singh |
| author_sort | Chand, Ramesh |
| collection | Repository of Agricultural Research Outputs (CGSpace) |
| description | Despite a growing dairy industry in India, farmers’ lack of access to organized markets and institutional credit remains one of the major hindrances in improving the scale and productivity of dairying. Using data from a survey of 612 households from the state of Punjab, India, this paper evaluates farmers’ choices of dairy value chains and their financing mechanisms. The study finds that 62 percent of the sample farmers representing 69 percent of the total milk sales are connected with formal value chains driven by cooperatives, multinational companies and private domestic processors. Small dairy farmers are associated more with informal value chains but they are not excluded from the formal value chains. The performance of different value chains in terms of productivity and profitability of dairying is almost on par. Also, there is hardly any difference in the milk price offered by formal and informal buyers pointing towards milk market being competitive. More than half of the farmers borrow credit both from within and outside the chain for dairying related activities. Chain-based financing is restricted to only one-fourth of the borrowers and mostly to those associated with informal value chains. Financing by commercial banks and other financial institutions is limited to only 9 percent of the borrowers, mainly larger farmers. The socially-disadvantaged and smallholder farmers are often neglected in institutional lending because of their lack of physical assets to use as collateral against loans. Value chain approach, due to its product market orientation, can serve as an entry point for financial institutions to improve their outreach to smallholders. The innovative financial products, such as ‘dairy credit card’ and ‘contract as collateral’ would enable them to adopt yield-enhancing technology and inputs and also to scale up their dairy activity. |
| format | Artículo preliminar |
| id | CGSpace147674 |
| institution | CGIAR Consortium |
| language | Inglés |
| publishDate | 2016 |
| publishDateRange | 2016 |
| publishDateSort | 2016 |
| publisher | International Food Policy Research Institute |
| publisherStr | International Food Policy Research Institute |
| record_format | dspace |
| spelling | CGSpace1476742025-11-06T07:18:04Z Formal versus informal: Efficiency, inclusiveness, and financing of dairy value chains in India Chand, Ramesh Joshi, Pramod Kumar Saxena, Raka Rajkhowa, Pallavi Khan, Md. Tajuddin Khan, Mohd. Arshad Chaudhary, Khyali R. Birthal, Pratap Singh value chains informal sector microeconomics economic development smallholders markets credit dairy finance Despite a growing dairy industry in India, farmers’ lack of access to organized markets and institutional credit remains one of the major hindrances in improving the scale and productivity of dairying. Using data from a survey of 612 households from the state of Punjab, India, this paper evaluates farmers’ choices of dairy value chains and their financing mechanisms. The study finds that 62 percent of the sample farmers representing 69 percent of the total milk sales are connected with formal value chains driven by cooperatives, multinational companies and private domestic processors. Small dairy farmers are associated more with informal value chains but they are not excluded from the formal value chains. The performance of different value chains in terms of productivity and profitability of dairying is almost on par. Also, there is hardly any difference in the milk price offered by formal and informal buyers pointing towards milk market being competitive. More than half of the farmers borrow credit both from within and outside the chain for dairying related activities. Chain-based financing is restricted to only one-fourth of the borrowers and mostly to those associated with informal value chains. Financing by commercial banks and other financial institutions is limited to only 9 percent of the borrowers, mainly larger farmers. The socially-disadvantaged and smallholder farmers are often neglected in institutional lending because of their lack of physical assets to use as collateral against loans. Value chain approach, due to its product market orientation, can serve as an entry point for financial institutions to improve their outreach to smallholders. The innovative financial products, such as ‘dairy credit card’ and ‘contract as collateral’ would enable them to adopt yield-enhancing technology and inputs and also to scale up their dairy activity. 2016-03-04 2024-06-21T09:23:10Z 2024-06-21T09:23:10Z Working Paper https://hdl.handle.net/10568/147674 en https://hdl.handle.net/10568/149959 https://hdl.handle.net/10568/151369 Open Access application/pdf International Food Policy Research Institute Birthal, Pratap S.; Chand, Ramesh; Joshi, Pramod Kumar; Saxena, Raka; Rajkhowa, Pallavi; Khan, Md. Tajuddin; Khan, Mohd Arshad; and Chaudhary, Khyali R. 2016. Formal versus informal: Efficiency, inclusiveness, and financing of dairy value chains in India. IFPRI Discussion Paper 1513. Washington, DC: International Food Policy Research Institute (IFPRI). https://hdl.handle.net/10568/147674 |
| spellingShingle | value chains informal sector microeconomics economic development smallholders markets credit dairy finance Chand, Ramesh Joshi, Pramod Kumar Saxena, Raka Rajkhowa, Pallavi Khan, Md. Tajuddin Khan, Mohd. Arshad Chaudhary, Khyali R. Birthal, Pratap Singh Formal versus informal: Efficiency, inclusiveness, and financing of dairy value chains in India |
| title | Formal versus informal: Efficiency, inclusiveness, and financing of dairy value chains in India |
| title_full | Formal versus informal: Efficiency, inclusiveness, and financing of dairy value chains in India |
| title_fullStr | Formal versus informal: Efficiency, inclusiveness, and financing of dairy value chains in India |
| title_full_unstemmed | Formal versus informal: Efficiency, inclusiveness, and financing of dairy value chains in India |
| title_short | Formal versus informal: Efficiency, inclusiveness, and financing of dairy value chains in India |
| title_sort | formal versus informal efficiency inclusiveness and financing of dairy value chains in india |
| topic | value chains informal sector microeconomics economic development smallholders markets credit dairy finance |
| url | https://hdl.handle.net/10568/147674 |
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