Key factors for increasing farmer participation in markets: evidence from the Malian dairy sector

Abstract

Substantial growth in Malian milk supply is necessary to meet rising demand for dairy products while also improving the livelihoods of milk producers and strengthening the competitiveness of the Malian dairy sector against imports. We applied a Cragg two-tiered model to a nationally representative dataset of dairy farming households to examine factors influencing market participation decisions. Four key findings and corresponding policy implications emerged. Firstly, dairy herd size was positively associated with market entry and milk sales. Improving the dissemination of higher-yielding improved breeds, to which less than 10% of households had access, should result in an increase in milk supply. Secondly, herd access to water, feed, and veterinary care also had the positive effect of increased milk supply, highlighting the importance of increased investment in animal health and nutrition. Thirdly, female-headed households were more likely to enter milk markets and they sold greater volumes than male-headed households. Because women typically face inequitable access to productive resources, gender-responsive policies and programs in the dairy sector should help to stimulate milk supply. Fourthly, an increase in milk price was associated with an increase in milk sales. This provides evidence that Malian milk producers are responsive to price incentives, while underlining the importance of incorporating dairy products into existing market information systems.