Supply response in Indian dairying

Abstract

Owing to several price and non-price factors, India’s dairy sector has grown remarkably in the past four decades. In this paper, we assess relative contributions of such factors to the growth of diary sector. Our results showed that dairying, in terms of both animal stock and yield, is not much responsive to prices of output as well as inputs. However, in the long run, the yield responds positively to technological change in animal breeding, feed supplies, veterinary services and markets. These findings lead us to argue that the dairy policy should focus on pushing up adoption of yield-enhancing technologies, provision of animal health, breeding and extension services, and strengthening of market linkages.

Keywords

• Dairy
• Markets
• Prices
• Services
• Supply response
• Technology