Marketing China's milk: A case study of the sales activity of dairy farmers in greater Beijing

Small farmer participation in marketing chains in emerging commodity markets and the determinants of their marketing channel choices are the center of many recent empirical and theoretical papers in the literature. The dairy sector is emerging in China. There are many fundamental questions about how farmers make dairy marketing decisions in China at the farm gate level that are unanswered. This makes the dairy sector in China a good place to study farmers in emerging marketing chains. Based on three sets of unique data collected in the mid-2000s in Greater Beijing, the analyses show that small farmers were the major producers of milk. There is no evidence that small farmers are being excluded from emerging marketing channels. One of the differences of China's dairy sector in the mid-2000s is that its marketing chain itself had many different types of agents that procure milk - and few of them were large; most were individual entrepreneurs. The high level of the competiveness may be the reason that individual agents do not have monopoly power and why small farmers can operate in the system.

Research Highlights►The dairy sector is emerging in China. ►Small farmers were the major producers of milk. ►Small farmers were not being excluded from emerging marketing channels.