Application of Agency Theory in the Dairy Industry of Bangladesh A Case Study of PRAN Dairy Limited

Abstract

Farmers in rural Bangladesh have been involved in the dairy industry since the 17th century. It is widely regarded as a means ofsubsistence. Milk is used in nutrition, cottage industries, and industrial dairy processing. PRAN Dairy Limited (PDL) in Bangladeshworks with rural dairy farmers under a contractual partnership to secure daily milk supplies. This study discusses PDL's relationshipwith rural dairy farmers through the lens of Agency Theory. In four districts of Northern Bangladesh, 45 farmers were selected andinterviewed; PDL has worked with them for at least ten years. This study employs the qualitative method with NVIVO12 to analyzethe interview transcripts thematically. A new version of the agency contract in the dairy industry was created by categorizing the existingone using a set of 15 codes based on five themes (risk, motivation, skills, penalties, and efforts). The study concluded that theimplications of Agency Theory in the dairy industry from Bangladesh's perspective paved the way for multidisciplinary approaches touncover more research opportunities in this sector, such as farmers' intentions to join the agency relationship with PDL.

Moo-ving Forward: How Access to the Internet is Transforming Dairy Farming in Bangladesh

“…The production of milk in Bangladesh has demonstrated a continuous upward trend. Furthermore, during 2018-2019, the private sector was responsible for the production of 9.920 million metric tonnes of milk, making a substantial contribution to alleviating poverty and malnutrition challenges in Bangladesh, while also generating employment opportunities; an example of this is PRAN Dairy Limited (PDL), a subsidiary of the PRAN Group, which plays a vital role in mitigating rural poverty and food insecurity in Bangladesh, highlighting the importance of striving for economic self-sufficiency, wherein PDL, alongside other endeavors within the dairy sector, endeavors to enhance the competitiveness of small-scale farmers and keep them well-informed about the dynamic market conditions [26]. The practice of dairy farming holds significant potential in benefiting impoverished rural households by contributing to their nutritional needs, income generation, employment opportunities, and the integration of diverse farming systems [27].…”