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 of
subsistence. Milk is used in nutrition, cottage industries, and industrial dairy processing. PRAN Dairy Limited (PDL) in Bangladesh
works with rural dairy farmers under a contractual partnership to secure daily milk supplies. This study discusses PDL's relationship
with rural dairy farmers through the lens of Agency Theory. In four districts of Northern Bangladesh, 45 farmers were selected and
interviewed; PDL has worked with them for at least ten years. This study employs the qualitative method with NVIVO12 to analyze
the interview transcripts thematically. A new version of the agency contract in the dairy industry was created by categorizing the existing
one using a set of 15 codes based on five themes (risk, motivation, skills, penalties, and efforts). The study concluded that the
implications of Agency Theory in the dairy industry from Bangladesh's perspective paved the way for multidisciplinary approaches to
uncover more research opportunities in this sector, such as farmers' intentions to join the agency relationship with PDL.