| Peer-Reviewed

Spatial Planning Competitiveness Integrants in Dairy Production and Commercialization of Smallholder Dairy Value Chain Development in Uasin Gishu County, Kenya

Received: 12 April 2016     Accepted: 22 April 2016     Published: 28 July 2016
Views:       Downloads:
Abstract

Many rural households in developing economies majorly depend on smallholder farming activities. In Kenya, smallholder dairy farming grows at 4.1% in contrast to 1.2% for agriculture sector as a whole. Uasin Gishu County is the leading milk producer in Kenya with 70% subsistence, 20% semi-commercialized and 10% commercialized smallholder farming respectively. However, dairy production in this County is experiencing structural changes towards intensification and commercialization. Commercializing smallholder dairy value chain is critical in providing ways out of poverty and for sustainable rural development. Studies have shown that competitiveness of smallholder dairy production varies with intensification from free grazing, semi-zero grazing or zero grazing. This is true for Uasin Gishu County where rapidly declining household land sizes is contributing to increased intensification and commercialization in dairy production. Inefficiency of milk production leads to the sub-sector being uncompetitive in the market due to relatively high cost of milk production and low output. The objective of this paper is to establish the influence of competitiveness of dairy production on commercialization of smallholder dairy value chain development. Social survey research design was used to obtain both secondary and primary data. A sample size of 384 smallholder dairy producers was studied out of a population of 50,457 respondents. Cobb-Douglas stochastic frontier production function was used to estimate the technical and economic efficiency of smallholder dairy production while the profit function was utilized to measure the gross margin and profit of dairy production. Results indicate that presence of technical and economic inefficiencies had influence on milk production. Technical and economic efficiency increased with the level of intensification of milk production. The elasticity of milk production was an increasing function of cost of feeds and equipment in the three production systems with statistical significance at 5%.

Published in Urban and Regional Planning (Volume 1, Issue 2)
DOI 10.11648/j.urp.20160102.12
Page(s) 36-44
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2016. Published by Science Publishing Group

Keywords

Competiveness, Dairy Production, Commercialization, Smallholder Dairy Value Chain Development, Uasin Gishu County

References
[1] Alemdar, T., Bahadir, B. and Oren, M. N. (2010). “Cost and Return Analysis and Technical Efficiency of Small Scale Milk Production: A Case Study for Cukurova Region, Turkey”. Journal of Animal and Veterinary Advances. 9 (4): 844-847.
[2] Alvarez A., Corral J., Solís D. and Pérez J. A. (2008). “Does Intensification Improve the Economic Efficiency of Dairy Farms?” Journal of Dairy Science: 91 (9): 3693-8.
[3] Bahta, S. and Malope, P. 2015. Measurement of competitiveness in smallholder livestock systems and emerging policy advocacy: an application to Botswana. International Livestock Research Institute, Gaborone, Botswana.
[4] Baltenweck, S., J. Staal, M. Owango, H. Muriuki, B. Lukuyu, G. Gichungu, M. Kenyanjui, D. Njubi, J. Tanner and Thorpe, W. (2000).“Intensification and Competitiveness of Smallholder Dairy Production Systems in the Greater Nairobi Milk-Shed.” Kenya Agricultural Research Institute/Ministry of Agriculture/International Livestock Research Institute Report, Nairobi, Kenya. 11 pp.
[5] Battese, G. E. (1992), “Frontier Production Functions and Technical Efficiency: A Survey of Empirical Applications in Agricultural Economics”, Agricultural Econonics Journal 7, 185–208.
[6] Biradar G. S., Dande K. G., Chavan B. R. and Gaikwad S. M. (2012). “The Study of Economics of Milk Production in Latur District of India”. Journal of Animal Production Advances 2 (2): 135-137.
[7] Burdine, K., Mosheim, R., Blayney, D. P. and Maynard, L. J. (2014). “Livestock Gross Margin-Dairy Insurance: An Assessment of Risk Management and Potential Supply Impacts.” ERR-163 Economic Research Service/United States Department of Agriculture (USDA).31 pp.
[8] Coelli, T. J. (1996). A Guide to DEAP version 2.1.: A Data Envelopment Analysis (Computer) Program. Center for Efficiency and Productivity Analysis (CEPA) Working Paper No. 96/08. University of New England, Armidale, Australia. 50pp.
[9] Constantin, P. D., Martin, D. L., and Rivera, E. B. (2009). Cobb-Douglas, Translog Stochastic Production Function and Data Envelopment Analysis in Total Factor Productivity in Brazilian Agribusiness. The Flagship Research Journal of International Conference of the Production and Operations Management Society. Vol 2. No. 2.
[10] Delbridge, T. A., Fernholz, C., Lazarus, W. and King. P. R. (2011). “A Whole-Farm Profitability Analysis of Organic and Conventional Cropping Systems.” Selected Paper Prepared for Presentation at the Agricultural and Applied Economics Association’s 2011 AAEA and NAREA Joint Annual Meeting, Pittsburgh, Pennsylvania, July 24-26, 2011.
[11] Ele, I. E., Omini, G. E and Adinya, B. I. (2013). Assessing the extent of Commercialization of Smallholding Farming Households in Cross River State, Nigeria. Journal of Agriculture and Veterinary Science. 4 (3): 49-55.
[12] Garcia, O., Balikowa, D., Kiconco, D., Ndambi, A. and Hemme, T. (2008). “Milk Production in Uganda: Dairy Farming Economics Development Policy Impacts.” International Farm Comparison Network (IFCN). IFCN Dairy Research Centre, Germany. 49 pp.
[13] Government of Kenya (G. O. K, 2010a). Kenya National Dairy Master Plan, Nairobi.
[14] Government of Kenya (G. O. K. (2013a). “Uasin Gishu County Annual Report.” Ministry of Agriculture, Livestock and Fisheries, Eldoret. pp. 112.
[15] Government of Kenya (G. O. K), 2013b). Sessional Paper No 5 of 2013 on National Dairy DevelopmentPolicy. Government Printer, Nairobi.
[16] Government of Kenya (G. O. K). (2013c). County Integrated Development Plan; Uasin Gishu County, Eldoret, Kenya.
[17] International Fund for Agriculture Development (IFAD), (2015). Smallholder Dairy Commercialization Programme Additional Financing: Updated Programme Design Report. IFAD, Rome. 54 pp.
[18] Jansik, C. Irz, X., and Kuosmanen, N., (2014). Competitiveness of Northern European dairy chains. MTT Agrifood Research Finland Economic Research Publications 116. 162 pp.
[19] Kibiego, M., Lagat, J. and. Bebe, B. (2015). Competitiveness of Smallholder Milk Production Systems in Uasin Gishu County of Kenya. Journal of Economics and Sustainable Development Vol. 6, No. 10: 39-45.
[20] Kilic, O, Vedat, C. and Alka, I. (2010). Determinants of economic efficiency: A case study of hazelnut (Corylus avellana) farms in Samsun Province, Turkey, New Zealand Journal of Crop and Horticultural Science, 37: 3, 263-270.
[21] Lipsey, R. G. & Chrystal, K. A. (2004), “Economics, 10th Edition.” Oxford University Press Inc., New York. 699 pp.
[22] Lovo, S. (2013). Pension Transfers and farm household technical efficiency: Evidence from South Africa. American Journal of Agricultural Economics. (2011) 93 (5): 1391-1405.
[23] Melesse, T. M. (2015). Agricultural Technology Adoption and Market Participation under Learning Externality: Impact Evaluation on Small-scale Agriculture from Rural Ethiopia. Working Paper No. 2015/06. Maastricht School of Management. 36 pp.
[24] Manoharan, R., Selvakumar, K. N. & Serma, S. P. (2004), “Efficiency of Milk Production in Pondicherry: A Frontier Production Approach”, Indian Journal of Animal Resources 38 (1), 20-24.
[25] Mburu, L. M., Gitu, K. W. and Wakhungu, J. W. (2007). “Cost-Benefit Analysis of Smallholder Dairy Cattle Enterprises in Different Agro-Ecological Zones in Kenya Highlands”. Livestock Research for Rural Development 19 (7) 2007.
[26] Michalickova, M., Z. Krupova, M. andKrupa, E. (2014). Determinants of Economic Efficiency in Dairy Cattle and Sheep. Slovak Journal of Animal Science 47 (1): 39-50Michalickova, M., Krupova, Z. & Krupa, E. (2013). “Technical Efficiency and its Determinants in Dairy Cattle”, Acta Oeconomica et Informatica XVI, 2–12.
[27] Michalickova, M., Krupova, Z. and Krupa, E. (2013). Technical Efficiency and its Determinants in Dairy Cattle. Acta Oeconomica et Informatica. XVI: 2–12.
[28] Montpellier Panel, (2013). Sustainable Intensification: A New Paradigm for African Agriculture, London. Morgan, N. (2008). Dairy Policies and Sector Planning. Food and Agriculture Organization of the United Nations (FAO), Bangkok. 15 pp.
[29] Muriuki, H. (2011), “Dairy Development in Kenya”, Food and Agriculture Organization of the United Nations (FAO), Rome. 52 pp.
[30] Nan, J. and Basil, S. (2014). Cost Efficiency of Dairy Farming in New Zealand: a stochastic frontier analysis. Department of Economics, Auckland University of Technology, New Zealand. 26 pp.
[31] Otieno, D., Hubbard, L. and Ruto, E. (2014). Assessment of Technical Efficiency and its Determinants in Beef Cattle Production in Kenya. Journal of Development and Agricultural Economics. Vol 6 (6): 267-278.
[32] Qushim, B., Gillespie, J. &Nehring, R. F. (2013), “Scale Economies and Economic Performance in Southeastern U.S. Cow-Calf Production”, Southern Association of Agricultural Economists. Annual Conference, February 2-5, 2013, Orlando, Florida.
[33] Sajjad, M. and Khan, M. (2010). “Economic Efficiency of Milk Production in District Peshawer: A Stochastic Frontier Approach.” Sarhad Journal of Agriculture. Vol. 26, No. 4: 655-653.
[34] Shockley, J. M., Carl R. Dillon, C. R. and Stombaugh, T. S. (2011). “A Whole Farm Analysis of the Influence of Auto-Steer Navigation on Net Returns, Risk, and Production Practices.” Journal of Agricultural and Applied Economics. 43 (1): 57–75.
[35] Wambugu, S., Kirimi, and Opiyo, J. (2011). “Productivity Trends and Performance of Dairy Farming in Kenya”. AWPS 43/2011. Tegemeo Institute of Agricultural Policy and Development, Nairobi. 45 pp.
[36] Wilson, P., Harper, N. and Darling, R. (2011). “Explaining Variation in Farm and Farm Business Performance in Respect to Farmer Segmentation Analysis.”85th Annual Conference of the Agricultural Economics Society. Warwick University. 23 pp.
Cite This Article
  • APA Style

    Kembe Moses Ageya, Charles Ochola Omondi. (2016). Spatial Planning Competitiveness Integrants in Dairy Production and Commercialization of Smallholder Dairy Value Chain Development in Uasin Gishu County, Kenya. Urban and Regional Planning, 1(2), 36-44. https://doi.org/10.11648/j.urp.20160102.12

    Copy | Download

    ACS Style

    Kembe Moses Ageya; Charles Ochola Omondi. Spatial Planning Competitiveness Integrants in Dairy Production and Commercialization of Smallholder Dairy Value Chain Development in Uasin Gishu County, Kenya. Urban Reg. Plan. 2016, 1(2), 36-44. doi: 10.11648/j.urp.20160102.12

    Copy | Download

    AMA Style

    Kembe Moses Ageya, Charles Ochola Omondi. Spatial Planning Competitiveness Integrants in Dairy Production and Commercialization of Smallholder Dairy Value Chain Development in Uasin Gishu County, Kenya. Urban Reg Plan. 2016;1(2):36-44. doi: 10.11648/j.urp.20160102.12

    Copy | Download

  • @article{10.11648/j.urp.20160102.12,
      author = {Kembe Moses Ageya and Charles Ochola Omondi},
      title = {Spatial Planning Competitiveness Integrants in Dairy Production and Commercialization of Smallholder Dairy Value Chain Development in Uasin Gishu County, Kenya},
      journal = {Urban and Regional Planning},
      volume = {1},
      number = {2},
      pages = {36-44},
      doi = {10.11648/j.urp.20160102.12},
      url = {https://doi.org/10.11648/j.urp.20160102.12},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.urp.20160102.12},
      abstract = {Many rural households in developing economies majorly depend on smallholder farming activities. In Kenya, smallholder dairy farming grows at 4.1% in contrast to 1.2% for agriculture sector as a whole. Uasin Gishu County is the leading milk producer in Kenya with 70% subsistence, 20% semi-commercialized and 10% commercialized smallholder farming respectively. However, dairy production in this County is experiencing structural changes towards intensification and commercialization. Commercializing smallholder dairy value chain is critical in providing ways out of poverty and for sustainable rural development. Studies have shown that competitiveness of smallholder dairy production varies with intensification from free grazing, semi-zero grazing or zero grazing. This is true for Uasin Gishu County where rapidly declining household land sizes is contributing to increased intensification and commercialization in dairy production. Inefficiency of milk production leads to the sub-sector being uncompetitive in the market due to relatively high cost of milk production and low output. The objective of this paper is to establish the influence of competitiveness of dairy production on commercialization of smallholder dairy value chain development. Social survey research design was used to obtain both secondary and primary data. A sample size of 384 smallholder dairy producers was studied out of a population of 50,457 respondents. Cobb-Douglas stochastic frontier production function was used to estimate the technical and economic efficiency of smallholder dairy production while the profit function was utilized to measure the gross margin and profit of dairy production. Results indicate that presence of technical and economic inefficiencies had influence on milk production. Technical and economic efficiency increased with the level of intensification of milk production. The elasticity of milk production was an increasing function of cost of feeds and equipment in the three production systems with statistical significance at 5%.},
     year = {2016}
    }
    

    Copy | Download

  • TY  - JOUR
    T1  - Spatial Planning Competitiveness Integrants in Dairy Production and Commercialization of Smallholder Dairy Value Chain Development in Uasin Gishu County, Kenya
    AU  - Kembe Moses Ageya
    AU  - Charles Ochola Omondi
    Y1  - 2016/07/28
    PY  - 2016
    N1  - https://doi.org/10.11648/j.urp.20160102.12
    DO  - 10.11648/j.urp.20160102.12
    T2  - Urban and Regional Planning
    JF  - Urban and Regional Planning
    JO  - Urban and Regional Planning
    SP  - 36
    EP  - 44
    PB  - Science Publishing Group
    SN  - 2575-1697
    UR  - https://doi.org/10.11648/j.urp.20160102.12
    AB  - Many rural households in developing economies majorly depend on smallholder farming activities. In Kenya, smallholder dairy farming grows at 4.1% in contrast to 1.2% for agriculture sector as a whole. Uasin Gishu County is the leading milk producer in Kenya with 70% subsistence, 20% semi-commercialized and 10% commercialized smallholder farming respectively. However, dairy production in this County is experiencing structural changes towards intensification and commercialization. Commercializing smallholder dairy value chain is critical in providing ways out of poverty and for sustainable rural development. Studies have shown that competitiveness of smallholder dairy production varies with intensification from free grazing, semi-zero grazing or zero grazing. This is true for Uasin Gishu County where rapidly declining household land sizes is contributing to increased intensification and commercialization in dairy production. Inefficiency of milk production leads to the sub-sector being uncompetitive in the market due to relatively high cost of milk production and low output. The objective of this paper is to establish the influence of competitiveness of dairy production on commercialization of smallholder dairy value chain development. Social survey research design was used to obtain both secondary and primary data. A sample size of 384 smallholder dairy producers was studied out of a population of 50,457 respondents. Cobb-Douglas stochastic frontier production function was used to estimate the technical and economic efficiency of smallholder dairy production while the profit function was utilized to measure the gross margin and profit of dairy production. Results indicate that presence of technical and economic inefficiencies had influence on milk production. Technical and economic efficiency increased with the level of intensification of milk production. The elasticity of milk production was an increasing function of cost of feeds and equipment in the three production systems with statistical significance at 5%.
    VL  - 1
    IS  - 2
    ER  - 

    Copy | Download

Author Information
  • School of Planning and Architecture, Maseno University, Maseno, Kenya

  • School of Environment and Earth Sciences, Maseno University, Maseno, Kenya

  • Sections