Impact of participation in Milk processing on Smallholder farmers’ Welfare: The Case of Kikima Dairy Cooperative Society in Makueni County, Kenya

Abstract

The productivity of the few established cash crops in Makueni County is affected by low rainfall reliability, which in turn leads to drought and crop failure. Thus, the dairy sector is a crucial source of livelihood for the residents in Makueni County. The dairy sector, however, is constrained by the lack of adequate processing capacity which has the potential to enhance the shelf life and retail price of milk. It’s for this reason that the Kikima dairy plant was established to provide a ready market for farmers’ milk and enhance the processing capacity within Makueni County. However, there is scanty empirical evidence on the impact this dairy plant has had on farmers’ welfare. The current study assessed the impact of participation in milk processing on farmers’ welfare in Makueni County using farm income as the welfare indicator. The study used primary data with a sample size of 200 respondents drawn from Mbooni and Kilome sub-counties in Makueni County. The respondents were stratified by participation and farmers were randomly selected from the two sampling frames to give a sub-sample of 100 project participants and 100 non- participants. Data were then analyzed using descriptive and inferential statistics. The endogenous switching regression model was used to analyze the impact. The results indicated a negative impact of participating in milk processing on farmers’ income.