Triple hurdle model of smallholder production and market participation in Kenya's dairy sector.

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In Kenya, strong demand and the fact that most of the nation's 3 million dairy cattle are in the hands of smallholders provides a tremendous opportunity for households to participate in the dairy market and increase rural incomes. Unfortunately, recent output has not kept pace with increasing demand, suggesting that barriers prevent rural farmers from tapping dairy's underexploited potential. Using 11-year panel data from 1275 smallholders, this study develops a model to determine the factors enabling smallholder participation in Kenya's dairy market, and uses the findings to identify strategies to improve dairy productivity and promote successful smallholder commercialization. Traditional double-hurdle market participation models are not adequate for addressing these objectives, primarily because they require the implicit assumption that all farmers are producers, whereas roughly 1/3 of rural Kenyan households do not produce milk in a given year. This study thus develops a "triple-hurdle" model, which allows for both non-producers and autarkic producers. Results suggest a bi-modal policy response to enable producers as well as the formal and informal purchasing enterprises to which they sell. Technical education, improved technologies, electrification, and access to credit are important to provide an enabling environment for producers. Along with the recent initiative to revive the parastatal dairy purchaser, evidence indicates that a more stable policy environment for small-scale traders, whose current market behavior is technically illegal and unpredictably regulated, would promote significant farmer response.
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Product Details

  • ISBN-13: 9781109241723
  • Publisher: ProQuest LLC
  • Sold by: Barnes & Noble
  • Format: eTextbook
  • Pages: 76
  • File size: 2 MB

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