Using nationally representative household-level data, the structure of milk markets is examined and the factors that determine the Indian dairy farmers’ choice of milk-marketing outlets are identified. The analysis of participation in various milk-marketing channels indicates that dairy farmers, irrespective of their asset-status, sales volume, and socio-economic status, prefer to sell their output through cooperatives and government agencies, even if these offer lower prices compared to the local traders. Concomitantly, of the various direct-to-consumer outlets, cooperatives are more inclusive and largely transcend the boundaries of caste and land size. Of the various economic factors that influence farmers’ choice, the access to institutional credit is critical in driving sales through the formal milk-marketing channels.
