| dc.description.abstract | The study was designed with the broad objective of contributing
to the understanding of Kenya milk production, marketing and consumption
as a subsystem of the Kenyan economy. The specific objectives
were to:
1) Analyse the supply of commercial milk from the national
dairy herd and project the supply to 1985 under alternative assumptions,
2) evaluate the supply response of smallholder milk production
in the Central Province of Kenya using parametric linear programming
in order to derive some guidelines for increasing smallholder milk
production in the country, 3) determine income and price elasticities
through the 'Use of time series data, 4) estimate the consumption of
milk and milk products and project the demand of these products using
income, population growth and oth~ explanatory variables, 5) analyse
the results of supply and demand projections and determine optimal
pricing policies; and 6) determine export levels of milk products and
assess Kenya's ability to continue as an exporter of dairy products.
The data were derived from several sources, including the
Central Bureau of Statistics, the Ministry of Agriculture, the
Department of Settlement, the Kenya Dairy Board, the Kenya Co-operative
Creameries, Co-operative Unions, publications and personal interviews.
The methods of analysis included descriptive, regression, and
parametric linear programming. Projections of milk supply were made
for the period 1978-1985 using alternative assumptions. Time series
data were used to estimate the demand equation of domestic fluid milk
from which price and income elasticities of demand were computed. The
domestic demand for milk and milk products were projected for the
perio~ 1978-1985 using the results of the regression analysis, the
1969 household budget survey, and other scenarios. A simultaneous
analysis of supply and demand for milk was made to derive projections
of dairy exports for the 1978-1985 period.
Optimal solutions were obtained by parametric linear programming
for a representative farm in each of the three agroeco1ogica1
zones--the coffee, tea and high altitude grassland (HALTG) zone. The
generated data were used to estimate a continuous milk supply function
for each zone from which price and operating capital elasticities were
determined.
The results of the supply analysis indicated an annual growth
rate of 5 percent. The demand of milk was inelastic with respect to
price but elastic with respect to income. The respective elasticities
were: 0.65 and 1.18. The export of dairy products were substantial
at the low domestic demand projections but they disappeared by 1984
at the high demand projections. The LP analysis reveals that substantial
increases in farm incomes could be achieved through a reorganization
of production. The percentage increases in farm incomes were --
for the coffee, tea and HALTG zone respectively as
compared with actual incomes. The marginal value products (MVPs) of
capital were high in all zones implying that increasing this resource
would lead to income gains. The MVPs of labor were high in peak periods
when hiring of extra labor would increase farm income. Land was
an important constraint in the coffee zone. The supply of milk was
more responsive to increases in operating capital than to increases in
milk prices. The price elasticities of supply were 0.67 for the HALTG
zone, 0.18 for the tea zone and 0.38 for the coffee zone. The corresponding
operating capital elasticity's were 1.88 for HALTG zone, 1.52
for the tea zone and .61 for the coffee zone.
The findings of the analyses provide many insights into the
milk subsystem of the Kenyan economy and could be useful in formulation
of agricultural and consumer policies. | en |
