Dairy Farmersa Welfare Losses from Farm-to-Retail Milk Price Adjustments: Highlight on Market Integration and Price Transmission
This study was carried out in four districts of Punjab province of Pakistan with a focus to examine milk market integration, price adjustments and price spreads in short-run and long-run equilibrium for fluid milk. Price transmission describes how a price change at one level of market chain corresponds to another level. Vector Error Correction Model (VECM) was applied to estimate the symmetry of price transmission. Monthly average prices of milk producer and consumer covering the period from 2010 to 2016 were used in the empirical analysis. Seasonality was an important factor in milk production and was kept in account. Stationarity between farm and retail prices was examined through Augmented-Dicky Fuller (ADF) test whereas, the nature of long-term co-integration among price series was estimated by Johansen co-integration test.
