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RESEARCH ARTICLESTATISTICAL TOOLS FOR THE PRICING ISSUESIN MILK PRODUCTION IN KERALA1 2Unnikrishnan T. and Ashok B.Kerala Veterinary and Animal Science UniversityABSTRACTThe main objectives of this study included assessment of trend and growth rates of milkproduction, milk price and feed price, correlation between the variables and testing the linear regressionequations with the highly correlated variables for prediction purposes. Yearly secondary data on milkproduction, wage of labourer, human population, cattle population, milk price and feed price collectedfrom various economic reviews of Government of Kerala for the period from 1991-92 to 2009-10 wereused for the analysis.INTRODUCTIONDespite, Kerala's milk production has anincreasing nature; there was a huge gap between itsproductivity and demand for milk and milk products.The major demand for milk in the State is met byimport from neighboring states and reconstitutedmilk. Hence, the milk price is mainly controlled byorganized sectors which hold only 16 percent of thetotal milk produce and administrative authorities andsecondary market holders, where the price is oftenbased on the indices such as fat and SNF. The dairyfarmers, who are having a very marginal profitability,do not have control over the milk price fluctuations.Also the laborers are moving towards moreremunerative fields than the agricultural sector andthe social status of the youth who are expecting whitecollar jobs do not want to take up any type of animalhusbandry activity. This made the shortage of labourin the state so that the interested poor farmer who wasliving with the income moved away from this sectordue to increased cost of production and less profit. InKerala, the main problem for the farmer is concerned1. Academic Consultant, Dept. of Statistics, Kerala Veterinaryand Animal Science University2. Former Vice Chancellor, Kerala Veterinary and AnimalScience Universityevery time the farmers' price is hiked; the consumerprice has gone up, because the government does notoffer subsidy while nearby states Karnataka andTamil Nadu gives a subsidy of Rs 2 and Rs 2.50respectively per litre of milk.The other main problem behind the lowinterest in dairy farmers is the decreased cultivationof paddy also increased the need for cattle feeds.Almost 90 per cent of the raw materials needed forthe compounded cattle feed are coming from nearbystate. Hence there need to have a sustenancemechanism where in the milk price should bedetermined by the in farm factors which affects itsproduction such as rate of feed ingredients, labourcharge etc. Statistics on diverse facets of milkproduction are required both to focus on theproblems confronting farming as well as farmers inKerala in the context of emerging challenges in theeconomy, and to throw light on priority areas in needof policy intervention. One cannot spell out exactlywhere forecasts are more frequently needed as theforecasting techniques have become essentialfeatures in all the ministries, establishments, publicand private sectors. As the food security corner ofKerala is concerned, such a forecasting will cradlethe government to tide over grim situations withease.JIVA Vol. 10 Issue 1 April 201217