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Marketing, co-operatives and price heterogeneity: evidence from the CIS dairy sector
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Professor Matthew Gorton
Sauer J, Gorton M, White J
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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:
competition for output,
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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