Marketing, cooperatives and price heterogeneity: evidence from the CIS dairy sector

Drawing on survey data, this paper identifies the determinants of variations in farm gate milk prices for three CIS countries (Armenia, Moldova and Ukraine). We apply a multi-level modeling approach, specifically a bootstrapped mixed-effects linear regression model. The analysis suggests three main strategies to improve the price received by farmers for their output: consolidation, competition for output and stable supply chain relationships. In Armenia and Ukraine selling through a marketing cooperative has a significant, positive, albeit modest, effect on farm gate milk prices. In all three countries studied, the size of dairy operations, trust and contracting also affect positively the prices received by farmers.