@article{Revoredo-Giha:152214,
      recid = {152214},
      author = {Revoredo-Giha, Cesar and Arakelyan, Irina and Chalmers,  Neil and Chitika, Rollins},
      title = {How Responsive to Prices is the Supply of Milk in Malawi?},
      address = {2013-07-09},
      number = {1336-2016-103940},
      series = {LAND ECONOMY WORKING PAPER SERIES},
      pages = {21},
      month = {Jul},
      year = {2013},
      abstract = {Dairy is a key investment sector for the Government of  Malawi. Advocacy institutions operating in the country have  successfully lobbied for increasing the duty applied for  powder milk, with the aim of improving the price received  by farmers. It should be noted that whilst an increase of  the price paid to farmers would rise their revenues  (assuming the same amount of milk delivery), it might also  bring additional blessings, in the sense that if farmers  respond to prices, they may rise their revenues beyond the  increase in prices, and furthermore, they would expand  their delivery of milk to processors offsetting the imports  of powder milk and reducing their idle capacity in  factories. Hence, the purpose of this paper is to measure  the responsiveness of the deliveries of milk at the milk  bulking groups to prices paid to farmers (i.e., the  elasticity of supply faced by processors). This is done  using a unique dataset that comprises information by milk  bulking group from January 2009 to February 2013. The  results indicate that the supply of milk is price  responsive. The price elasticity in the short term is equal  to 0.6 and in the long term is 1.44. This indicates that  farmers’ revenues not only benefit from an increase in the  price of milk but also from the increase in the quantity  produced. Furthermore, it indicates the possibility that  domestic producers could offset imports of milk powder by  processors, although answer to this requires further  research.},
      url = {http://ageconsearch.umn.edu/record/152214},
      doi = {https://doi.org/10.22004/ag.econ.152214},
}