Understanding Drivers of Demand for Milk: Empirical Evidence from Assam, NE India

1. Understanding Drivers of Demand for Milk: Empirical Evidence from Assam, NE India Presentation by Dr. Ma. Lucila Lapar 6th International Conference of the Asian Society of Agricultural Economists AIMCC, Makati City, Philippines 29 August 2008

2. The Context • Rising demand for milk and dairy products. • Dairy development as a pathway out of poverty. • Operation Flood, successful white revolution in India, bypassed NE India. • Low levels of productivity (supply) and consumption (demand) in the region. • Agricultural diversification to address development challenge

3. Background of the study • Comprehensive study of the dairy sector in Assam – WB, DDD, ILRI, national partners • Empirical information for Pro-Poor Dairy Development Plan for Assam • Three main components: • - study of consumers, • - study of milk market agents, • - study of milk producers

4. Objectives of the Study • Examine milk consumption patterns and preferences of Assamese consumers. • Identify key factors that influence consumers’ milk purchase decisions. • Derive implications for dairy development in Assam.

5. Hypotheses • Assamese consumers have homogeneous preferences for specific attributes of milk and dairy products. • Factors that condition milk purchase decisions by Assamese consumers include income, availability of differentiated products, market channels, ethnicity, and taste and preferences.

6. Survey sites and sample selection • Consumer survey (structured), 9 districts identified with potential for dairy development (DDD) • 1140 households and 60 institutional users (hotels, restaurants, schools, hospitals) • Sampling: 70% urban/peri-urban, 30% rural

7. Profile of Assamese consumers

8. Preference rating for milk and dairy products (10 highest)

9. Per capita consumption of milk and dairy products in Assam

10. Purchased milk and dairy products by Assamese consumers

11. Preference scores on fresh milk attributes

12. Preference scores on fresh milk attributes

13. Likelihood of purchase

14. Determinants of quantity purchased

15. Implications for dairy development • Taste preference a key factor for observed milk consumption patterns in Assam; raw milk consumption predominant, liking for processed dairy products increasing from a low base. • Potential for developing rural-based enterprises in traditional dairy products processing.

16. Implications for dairy development • Generic promotion campaign can increase consumer awareness of nutritional benefits from consuming milk. • Consumer preference for outlets that they trust, e.g., direct from producers or can guarantee quality and safety. • Certification scheme (+ training in milk handling) for informal milk vendors that are predominant outlets in urban areas.

17. International Livestock Research Institute Better lives through livestock Animal agriculture to reduce poverty, hunger and environmental degradation in developing countries ILRI  www.ilri.org