Indian J Dairy Sci 73(3): 260-267 260 RESEARCH ARTICLE Choice modelling for participation in milk marketing channels: Evidence from Punjab, India Nidhi Singhal 1 , Harjit Kaur 1 , Pampa Mukherjee 2 and Santanu Basu 1,3 1 Dr. S.S. Bhatnagar University Institute of Chemical Engineering & Technology, Panjab University, Chandigarh, India 2 Department of Political Science, Panjab University, Chandigarh 3 Department of Molecular Sciences, Swedish University of Agricultural Sciences, P.O. Box 7015, SE-750 07, Uppsala, Sweden Nidhi Singhal () Dr. S.S. Bhatnagar University Institute of Chemical Engineering & Technology, Panjab University, Chandigarh, India Email: nidhisinghal.25@gmail.com; Phone 8556962411 Received: 10 February 2020 / Accepted: 15 May 2020 / Published online: 12 July 2020 Indian Dairy Association (India) 2020 © Abstract: Over the last few decades India has witnessed tremendous growth in the dairy sector giving varied market opportunities to the milk producers. There have been growing concerns regarding exclusion of the lower castes and small holder producers from organised milk marketing channels. In this context, the paper studies the choice of milk marketing channel in relation to the demographic variables using a set of household level data from the districts of Ludhiana and Moga districts in Malwa region of Punjab. Choice modelling has been done using Bivariate Probit Model and the econometric model has been operationalized using software R. To overcome selection bias, a two-step analysis is undertaken to explain participation in liquid milk markets and conditioned on that is the choice of milk marketing channel. The study found that Buffalo is the preferred milch animal in this area. The region is dominated by organised milk marketing channel with 69% households selling milk to the organised channel. The study concludes that social barriers which are manifested by caste of the household hamper the capability of the SC households to participate in the organised milk marketing channel. Keywords: Bivariate probit model, Informal marketing channel, Organised marketing channel Introduction From the shortage of milk in the country at the time of independence (1947), India has since 1998 emerged as a top ranking milk producing country in the world. At present India produces almost 20% of the total liquid milk produced in the world. According to GoI (2017), the country produced 165.4 million tonnes in 2016-17. Milk group is the biggest source of income generation within the agricultural sector with an annual output value of Rs. 416611 crore, which is nearer to the combined value of cereals and pulses in the same period (CSO 2017). Milk and milk products are also an important source of calorie and protein intake for the significant vegetarian Indian population. Between 2000-01 and 2011–12, the share of milk and milk products in the monthly per capita food expenditure increased from 15.4% to 18.7% in rural areas and from 18.9% to 20.3 % in urban areas (GoI 2001; GoI 2012). India is thus witnessing tremendous growth in the dairy sector due to rise in market demand, expanding urban population, changing lifestyles, and increasing health consciousness (Kumar et al. 2014). Due to formalization of Indian dairy sector, food safety regulations are becoming increasingly important in the dairy sector in India. These changes make market access more difficult for the informal sector and encourage a higher involvement of the private sector in organized milk marketing. All these factors have contributed to creating a market interest for the newer players in the dairy sector and are catalytic in expansion of business operations of traditional cooperatives and companies already in dairy business. Since past three decades, dairy sector in the country transitioned from protectionism to liberalization which led to the growth of the private milk processors (Birthal et al. 2017). The state of Punjab, the domain of our study and one of the most dairy- developed states in India too witnessed this trend. (Appendix I). By 2016-17, the milk processing capacity in the state increased to more than 80 lakh litres per day by 2016-17 from 42 lakh litres per day at the time of operation flood. A major part of the total milk processing capacity, around 75% belongs to the private sector. Consequently, the newly emerged dairy ecosystem is providing more avenues to the farmers for selling milk at the village level. With multiple players in the field, dairy sector is now witnessing https://doi.org/10.33785/IJDS.2020.v73i03.012