Evaluation of factors influencing smallholder dairy farmers’ decision to deliver milk to cooling plants in Sotik Sub-County, Kenya

Abstract

Kenyan dairy sub-sector has been undergoing many changes since the collapse of Kenya Cooperative Creameries (KCC) in 1992. There have been developments in establishment of milk cooling plants which are thought to reduce milk losses and benefit the smallholder dairy farmers besides bulking milk at one point for the processing firms. However, there is evidence of underutilization of the cooling plants and the reasons that inform farmers’ decision to use the cooling plants as milk marketing outlet have not been clearly established. Hence, there seems to be reluctance by farmers to deliver their raw milk through the cooling plants. To bridge this gap, the current study sought to evaluate factors influencing smallholder dairy farmer’s decision to deliver milk to cooling plants in Sotik Sub-County. Multi-stage sampling procedure was employed to select 150 smallholder farmers. Data was collected using structured questionnaires administered by enumerators and analyzed using both descriptive and inferential statistical techniques. Multivariate probit results indicated that; age, gender, education level, household size, price, distance, access to credit, extension service and group membership significantly influence the choice decision of the farmer to deliver milk to cooling plants. Farmers delivering to cooling plants had higher gross margin of KES 10.84 per litre compared to KES 8.15 and KES 7.27 per litre for cooperatives and vendors/neighbors, respectively. The observed difference was due to the costs incurred in selling milk to the different marketing outlets. It was also found that delivering milk to cooling plants positively and significantly increases the income of dairy farmers by KES 16,680 more than their counterparts per lactation period. This is an indication that a cooling plant is economically viable and an important tool in increasing smallholder dairy farmer’s income. The study therefore, recommended policy interventions in increasing market awareness through creation of strategies that would improve socio-economic conditions of smallholder. Furthermore, the government and non-governmental organizations in the dairy sector ought to expand the modern channels by establishing more milk cooling centers since they are more rewarding to the farmers.