| dc.description.abstract | The purpose of this study was to analyze the economics of smallholder dairy
production in Kiambu District, Kenya. As high potential agricultural land sizes
diminish in Kenya, it is critical that farmers attain high levels of economic efficiency
to contribute to household food security and to overall national development. The
specific objectives were to "test for both allocative efficiency among dairy farmers
and relative economic efficiency" between large and small dairy farms categorized
by herd size of the milking cows. It was anticipated that the results from this study
would have policy implications permeating both the micro- and macro-economic
levels.
Data were obtained from randomly selected dairy farms in Kiambu. Two stage
stratified random sampling technique was used to select the farms to participate.
The first stage involved the random selection of 6 of the 14 dairy societies in the
district. The second stage included randomly selecting 15 dairy farms from each
selected dairy society list, giving a total of 90 farms.
A Cobb-Douglas form of production function model was fitted on 57 farms with
complete data, using the major inputs the dairy farmers were using after other
functional forms were tested and found unsuitable. Results indicated that
concentrates and hired labour were positively and statistically significant (5%) in
influencing milk yields while forage was negatively and statistically significant (1%)
in influencing milk yields. The latter was an unexpected sign for the variable and
could only be attributed to either its poor quality or measurement problems.
Operating capital positively and significantly (10%) influenced milk yields. A test for
efficiency of resource allocation showed that concentrates were being allocated
inefficiently (below optimal level) while there was efficiency in the use of operating
capital, hired labour, family labour and by-products.
An important conclusion from these results is that substantial increases
in milk yields and farm profits could be realized from increasing the levels of use of
concentrates above the levels presently being fed. It is recommended that: (1)
farmers be educated on the benefits of increasing the current level of concentrate
feeding to their animals; (2) ways be found of removing constraints, such as lack of
credit and inadequate feed supply, currently affecting the accessibility to
concentrates by farmers and (3) preservation technologies be taught to farmers so
that they manage fodder and other excess feeds more efficiently to feed their
animals during times of scarcity.
Profit function analysis showed that small and large farms had equal economic
efficiency. The regression coefficients for concentrates and operating capital were
both positively and significantly influencing farm profits at 1%. The rest of the variables included in the model were not significant at 5%. The main conclusion from this finding is that small and large farms have equal economic efficiency.
Therefore, the results of this study confirm that there are no significant differences
between small and large farms (categorized by herd size criterion). Since the
majority of these farms were actually smallholders by acreage criterion, they
belonged to the same population and, therefore, the confirmation of equal
economic efficiency in dairy production. Given the above results, the main strategy
to increase productivity should be geared towards facilitating intensification of land
use patterns by ensuring farmers have access to land-saving technologies (e.g.
zero grazing and irrigation) in a diminishing land size situation and appropriate
information to make profitable use of such technologies. | en |
