The economic viability of value-based food chain for dairy farms in mountain regions: an econometric analysis approach

Abstract

The attention of this paper is drawn to analyze the economic potential of involvement of farmers into the small-medium sized value-based food chain (VBFC). The survey represents a solid dana basis from which econometric modelling approach was further developed. Empirical results reveal the positive economic viability on a general level; this means more stable purchase price of raw milk for dairy farms, which are the part of value-based food chain. Results point at inelastic demand for milk and milk related products. Furthermore, there are some accompanying and underlying indirect social benefits, such as production of high-quality food products, more stable and constant demand for raw milk, steady payments and better social situation. The last one is especially important for the farms operating in less-favored mountain areas where the survey was actually conducted.

Keywords

• mountain dairy farms; demand for milk; Value-based food chain; econometric modelling