Improving the resilience of the agricultural sector to external shocks

This study examines the Indian dairy sector and investigates the factors that contribute to price fluctuations. The researchers analyze producer prices in different milk-producing regions and seek to understand the reasons behind any disruptions in prices. The results indicate that wholesale milk prices did not change significantly following the sudden lockdown implemented in the five milk zones. However, retail prices increased in the East zone, and dairy product sales declined in all milk production zones. The study identifies disruptions in milk marketing channels, logistics, and transportation in the East zone, which has a less extensive cooperative infrastructure compared to other regions. Additionally, the East zone lacks sufficient dairy infrastructure such as cold chains, which exposes producers to market uncertainties. The analysis reveals that the decision of dairy cooperatives to continue paying milk producers, despite decreased sales, significantly contributed to the resilience of India's dairy sector during the COVID-19 pandemic. The findings emphasize the importance of establishing robust institutional infrastructure, such as dairy cooperatives, but also highlight the need for additional resources for dairy processors to cope with higher risks. Relaxing certain regulations, such as labor movements, and improving access to essential inputs are crucial for sustaining production. Furthermore, government assistance should be provided to those who face obstacles in using market channels due to reasons beyond their control.