Smallholder Dairy Commercialisation Programme

Smallholder dairy farmers in Kenya rely on livestock for income and food security. However, milk production is regularly threatened by inadequate access to markets, animal diseases, poor quality and unstable supplies of animal food and feeds with corresponding decreases in market milk supply, poor rural infrastructure, and inadequate access to artificial insemination services and other veterinary services. More importantly, small dairy farmers face a series of constraints that prevent them from effectively commercializing their milk, including large seasonal fluctuations in milk output and prices, poor rural infrastructure (roads and electricity), limited skills with which to bargain with input suppliers and output purchasers, lack of management and business skills, and inefficiencies in the post-harvest segment of the dairy value chain.

The Smallholder Dairy Commercialisation Programme (SDCP), implemented by the Government of Kenya from 2006 to 2015, was designed to reach Dairy Groups engaged in milk production in nine milk producing counties in the Western region of Kenya. The overall goal of SDCP is to increase the income of poor rural households that depend substantially on production and trade of dairy products for their livelihoods. The SDCP was implemented through various inter-related components. First SDCP provided training on organisational, managerial, and enterprise skills (e.g., bookkeeping, accounting, financial planning) to farmers. Second, the program targeted household production by aiming to enhance dairy farming productivity and reduce production costs through grants, trainings, field days, and demonstrations. Third, SDCP aimed to strengthen market linkages for small-scale milk producers by improving road infrastructure and conducting additional trainings to on milk handling practices and value addition opportunities.

In this study AIR, with its partner Lead Analytics, investigates program impacts and implementation of the SDCP. Our main research question is: Does SDCP improve the well-being of dairy farmers through improved animal management, increased production and productivity, improved efficiency, and a rise in farmer incomes and food security? To better understand our primary research question, we consider how the process by which SDCP is implemented and contextual factors related to the process influenced the effectiveness of the program. To address the research questions we use a combination of qualitative and quantitative methods. Quantitatively, we rely on a quasi-experimental approach using a matching design. We use a comprehensive approach to construct the comparison group. First, we use existing administrative information from the original program targeting to identify similar non-program areas that were not affected by SDCP due to capacity constraints. Second, we discuss the filtered control communities with local experts and stakeholders to determine which of the pre-selected control areas were more similar to treatment communities at project inception. Then, we conduct a comprehensive dairy survey to a sample of 2,500 dairy farmers where we collect key information to map out the causal chain among inputs, activities, outputs, outcomes, and impacts as well as the underlying assumptions of the SDCP program.  We draw from qualitative methods to augment the quantitative surveys by capturing interaction among complex and changing contextual factors that could influence the impact of the SDCP, conduct a cost analysis, and evaluate program fidelity.

Juan Bonilla
Managing Economist