A Multinomial Logit Approach to Smallholder Milk Marketing Channels for Improved Competitiveness in the Kenyan Dairy Value Chain

Abstract

Selection of appropriate markets is a major challenge facing smallholder dairy farmers in Kenya. This study therefore sought to understand factors influencing milk marketing channel choices among smallholder dairy farmers in Kinangop Sub County. Data from a sample of 230 smallholder dairy farmers was collected using structured questionnaires and analysed using both descriptive and inferential statistical methods. The study identified three marketing channels namely; milk processors (46.09) %, milk bars (32.61) % and direct sales (21.3) %. Similarly, years of schooling (p≤0.1), on-farm income (p≤0.1) and milk output (p≤0.01) were statistically significantly different across the three marketing channels. The average farm gate price was kes 32.6 per litre. From the multinomial logistic regression, marital status, extension access, association membership, mode of payment and transport ownership significantly influenced marketing channels. Further results showed that majority (53.48) % of farmers never had access to market information. The study therefore recommended policies geared towards enhancing more years of formal education and market intelligence so as to facilitate selection of appropriate marketing channels, more training on dairy husbandry practices with the aim of increasing milk output, facilitate access to transport facilities so as to enhance milk delivery to milk collection centres and a review of payment arrangements between milk processors and farmers so as to avoid the problem of delayed payments to farmers.