|
Competitiveness of the Smallholder Dairy
Enterprise in Kenya
This policy brief outlines the competitiveness of the smallholder
dairy enterprise in Kenya. The dairy industry forms a significant
part of the rural economy in Kenya, accounting for 14% of
agricultural gross domestic product (GDP) as well as being
a primary source of livelihood for many smallholders, who
account for over 70% of total marketed milk in the country.
This brief attempts to assess the profitability and competitiveness
of the smallholder dairy enterprise in Kenya by comparing
costs to income in the industry, based on a study by the Smallholder
Dairy Project (SDP) of farms in three locations. This brief
also explores the issue of non-marketed benefits and presents
some results from a survey. Less emphasis has been placed
on such benefits, mainly because they are difficult to evaluate.
However, non-marketed benefits from keeping livestock are
substantial. Other key points are:
- The smallholder dairy enterprise in Kenya is competitive
and returns good profits across all production systems,
and can provide remunerative employment when off-farm employment
is scarce. Non-marketed benefits can augment these returns.
- The cost of milk production rises as systems become more
intensive.
- Poor infrastructure is a major constraint on production,
significantly reducing farm-gate prices and raising the
cost of inputs and services.
- Policies that target improvement of road infrastructure
and monitoring of feed quality are likely to have a positive
and significant effect on dairying in the country.
- Formal market outlets provide more uniform prices, and
encourage scaling up.
|
