Pricing Policy of Milk Rajasthan Co operative Dairy Federation Limited

Dairy farmers are under severe price pressure due to rapid increase in milk demand due to lower production costs in India, as well as the market control of retailers. Agricultural officials and legislative bodies in India are aware of these stresses and have responded in an effort to counter potential excess retail margins for liquid milk with emergency milk farm assistance, following a very low milk price, and with state legislation. We argue in this paper that the demand relationship will explain the asymmetric transition of fluid milk rates, high-low pricing, and the formation of a broad retail margin (chain surplus) frequently observed for fluid milk. It is also suggested that a sigmoid demand partnership creates an incentive for state policymakers to assist Indian dairy farmers across several policy choices to gain a greater share of the market dollar. Therefore, 5 regulatory frameworks of the milk supply channel (status quo, price gouging, and regulation of stocks, fair share strategy, and chain surplus return) are addressed and contrasted. In redistributing the chain surplus associated with the sigmoid demand relationship for fluid milk to dairy farmers, the supply control mechanism was found to be the most successful.