Abstract
This study examined the factors that determined dairy farmer households’ choice of a commercial milk marketing channel in Kericho County, Kenya. Multistage cluster sampling technique was employed in collecting data from 432 dairy farmers and survey data was analyzed using multivariate probit regression model. Marginal effect results revealed that a unit change in household’s pasture farm size and partnership in lobbying for better milk price increased the probability of selling milk only to commercial milk buyer by one and 19 percentage points respectively. The number of cows milked per day and milk storage/cooling raised the probability of selling raw milk to commercial buyers by 2.3 and 16.1 percentage points respectively. Commercial milk buyers valued security in raw milk supply which came from trusted relationships and from contracts with the dairy milk seller households. To increase the choices of commercial dairy milk marketing channels and hence the switching power of the dairy farmer households in Kericho County and by extension, Kenya as a whole, this study recommends strengthening the capacity of dairy farmer households by up scaling their technical knowhow and by enlarging their herd sizes. Further, the study recommends group formation, partnership development and increased financial investments in livestock milk markets by national and county governments.
Highlights
Agricultural markets in developing countries, including Sub-Saharan Africa (SSA), are undergoing rapid changes in response to strong economic growth, improved infrastructure and communication systems, and growing demand among consumers for higher quality products
Dairy farmer households were divided into three groups: those who sold raw milk directly to final consumers via farm gate sales, those that only sold to a commercial milk buyer and those that sold to both final consumers as well as commercial buyer(s) via local markets and informal sales
Most of the dairy farmer households sold their farm gate raw milk to more than one milk marketing outlet depending on the unit price offered, volume of milk produced, and the urgency of need for cash
Summary
Agricultural markets in developing countries, including Sub-Saharan Africa (SSA), are undergoing rapid changes in response to strong economic growth, improved infrastructure and communication systems, and growing demand among consumers for higher quality products. Livestock milk marketing is a favorite sector, where most African governments have chosen to intervene in a variety of ways [2]. These interventions range from outright fixing of wholesale and retail milk prices to monopolizing the export market, yet in many instances policy decisions on livestock milk marketing are often taken in the absence of vital information on how they affect smallscale livestock producers, traders and consumers. Informal milk markets continue to dominate over the formal markets by absorbing most of the milk from smallholder farmers and they account for over 80 percent of the total milk sold [5].
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