Abstract
The purpose of this chapter is to investigate the dynamics in dairy production in the period following the liberalization using panel data on 874 agricultural households in the Kenya Highlands. Our estimation results indicate that the private milk marketing sector works effectively and thereby stimulates the adoption of improved dairy technologies. Similarly, we find that better market access facilitates the adoption of these technologies. In short, this chapter clearly demonstrates that improved marketing systems are a critical factor affecting the improvement of dairy production systems.
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- 1.
Similar to other developing countries, there is seasonality in milk production in Kenya. This is due to the fact that feed are mainly grown under rainfed condition with limited feed conservation done. Since the milk production is seasonal, the price tends to fluctuate across seasons, if there is no price regulation.
- 2.
Ngigi (2005) notes that even before the liberalization, raw milk was directly sold to households in the neighborhood of the producing households in urban areas. However, raw milk traders were harassed by the police in urban areas, and the quantity of raw milk traded was considered to be much smaller before the liberalization than after the liberalization. This switch toward raw milk sales enables poorer urban consumers to increase their purchases of milk.
- 3.
As will be explained in the next section, the analyses in this study are conducted with the data collected in the rural household survey. The survey questionnaire covers questions related to household production and income but does not cover institutional changes in dairy marketing. To gain a better understating of the institutional changes of the milk marketing system during this transition period, we revisited the sample areas and interviewed traders, cooperative members, the KCC plant manager and workers, retailers, and dairy farmers.
- 4.
As Hayami and Kawagoe (1993) discuss, transactions based on local connections and family ties have the feature of restraining business counterparts from breaking rules. In our study areas, many small vendors collect milk from their neighboring dairy farms. Because of the local connection, it should not be so difficult for vendors to supervise the farms so that the farms do not dilute their milk by adding water. Cheating in transactions between vendors and traders has been kept under control to some extent by conducting milk tests randomly.
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Baltenweck, I., Yamano, T., Staal, S.J. (2011). Dynamic Changes in the Uptake of Dairy Technologies in the Kenya Highlands. In: Yamano, T., Otsuka, K., Place, F. (eds) Emerging Development of Agriculture in East Africa. Springer, Dordrecht. https://doi.org/10.1007/978-94-007-1201-0_6
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DOI: https://doi.org/10.1007/978-94-007-1201-0_6
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