DETERMINANTS OF SMALLHOLDER DAIRY FARMERS' ADOPTION OF VARIOUS MILK MARKETING CHANNELS IN CHONGWE DISTRICT

A Research Report presented to the Department of Agricultural Economics and Extension Education of the University of Zambia.

BY

MUSAKA MULANGA CHIKOBOLA

In Partial Fulfillment of the Requirements for the Degree of Bachelor of Agricultural Sciences

© Musaka Mulanga Chikobola, 2009

ACKNOWLEDGEMENTS

First and foremost I want to thank God Almighty for making it possible for me to complete

my studies.

I wish to express my heartfelt appreciation to Mrs. R. Lubinda my supervisor for the tireless

counsel and suggestions rendered in producing this report. I also wish to extend my gratitude

to all the Members of Staff of the Department of Agricultural Economics and Extension

Education for their efforts in my academic endeavors. I would also want to sincerely thank

my family members for their encouragement, moral and financial support.

Finally, I want to thank all my friends and classmates for the help they offered to me when I

needed them and for making my stay at Campus worthwhile.

i

ACKNOWLEDGEMENTS

First and foremost I want to thank God Almighty for making it possible for me to complete

my studies.

1 wish to express my heartfelt appreciation to Mrs. R. Lubinda my supervisor for the tireless

counsel and suggestions rendered in producing this report. I also wish to extend my gratitude

to all the Members of Staff of the Department of Agricultural Economics and Extension

Education for their efforts in my academic endeavors. I would also want to sincerely thank

my family members for their encouragement, moral and financial support.

Finally, I want to thank all my friends and classmates for the help they offered to me when I

needed them and for making my stay at Campus worthwhile.

T A B L E OF CONTENTS A C K N O W L E D G E M E N T S i

T A B L E O F C O N T E N T S ii

LIST O F T A B L E S iii

LIST O F A C R O N Y M N S iv

A B S T R A C T v

C H A P T E R O N E : I N T R O D U C T I O N 1

L I . Background 3

\.2. Problem statement 4

1.3. Objectives 5

1.4. Rationale 5

1.5. Organization of the Report 5

C H A P T E R T W O : L I T E R A T U R E R E V I E W 6

2.1. Introduction 6

2.2. Definitions of Key Terms 6

2.3. Smallholder Dairy Production in Zambia 7

2.4. Significance of Mi lk Marketing 8

2.5. Types of Dairy Marketing Systems in Sub-Saharan Africa 9

2.6. Variables likely to affect Adoption of Mi lk Marketing Channel 10

C H A P T E R T H R E E : R E S E A R C H M E T H O D O L O G Y 13

3.1 Introduction 13

3.2 Area of study 13

3.3 Data collection methods 13

3.4 Data analysis 14

3.5 Limitations of the Study 14

C H A P T E R F O U R : S T U D Y F I N D I N G S A N D D I S C U S S I O N 15

4.1. Introduction 15

4.2. Demographic Characteristics 15

4.3. Types of Mi lk Marketing Channels and the Extent of Use 17

4.4. Farmers' Perception of the Various Mi lk Marketing Channels 17

4.5. Factors Affecting the Adoption of Mi lk Marketing Channels 19

C H A P T E R F I V E : C O N C L U S I O N S A N D R E C O M M E N D A T I O N S 24

5.1. Introduction 24

5.2. Conclusions 24

5.3. Recommendations 25

R E F E R E N C E S 26

A P P E N D I C E S 28

Appendix 1; Questionnaire 29

ii

T A B L E O F C O N T E N T S

A C K N O W L E D G E M E N T S

T A B L E O F C O N T E N T S i

LIST O F T A B L E S ii

LIST O F A C R O N Y M N S iv

A B S T R A C T v

C H A P T E R O N E : I N T R O D U C T I O N 1

1. L Background 3

1.2. Problem statement 4

1.3. Objectives 5

1.4. Rationale 5

1.5. Organization of the Report 5

C H A P T E R T W O : L I T E R A T U R E R E V I E W 6

2.1. Introduction 6

2.2. Definitions of Key Terms 6

2.3. Smallholder Dairy Production in Zambia 7

2.4. Significance of Mi lk Marketing 8

2.5. Types of Dairy Marketing Systems in Sub-Saharan Africa 9

2.6. Variables likely to affect Adoption of Milk Marketing Channel 10

C H A P T E R T H R E E : R E S E A R C H M E T H O D O L O G Y 13

3.1 Introduction 13

3.2 Area of study 13

3.3 Data collection methods 13

3.4 Data analysis 14

3.5 Limitations of the Study 14

C H A P T E R F O U R : S T U D Y F I N D I N G S A N D D I S C U S S I O N 15

4.1. Introduction 15

4.2. Demographic Characteristics 15

4.3. Types of Milk Marketing Channels and the Extent of Use 17

4.4. Farmers' Perception of the Various Mi lk Marketing Channels 17

4.5. Factors Affecting the Adoption of Mi lk Marketing Channels 19

C H A P T E R F I V E : C O N C L U S I O N S A N D R E C O M M E N D A T I O N S 24

5.1. Introduction 24

5.2. Conclusions 24

5.3. Recommendations 25

R E F E R E N C E S 26

A P P E N D I C E S 28

Appendix 1: Questionnaire 29

ii

LIST OF TABLES

Table 1: Distribution o f Farmers by Age and Sex 15

Table 2: Distribution o f Farmers by Education Levels 16

Table 3: Distribution o f Dairy Cattle by Breed 16

Table 4: M i l k Marketing Channels 17

Table 5: Characteristics in Choice o f the Marketing Channel 18

Table 6: Physical capital differences between the various mi lk marketing channels 19

Table 7: Characteristics o f Surveyed Households 20

Table 8: The Services Received B y the Farmers 23

LIST OF ACRONYMNS

Central Statistical Office International Fund for Agricultural Development

Ministry of Agriculture and Cooperatives

Milk Collection Centers

Non Governmental Organizations

Statistical Program for Social Sciences

Sub-Saharan Africa

iv

ABSTRACT

Determinants of Smallholder Dairy Farmers' Adoption of Various Milk Marketing Channels in Chongwe District

Understanding the factors affecting smallholder dairy farmers' adoption of various milk marketing channels is essential to implementation of dairy marketing liberalization policies in Zambia. Adoption of milk marketing through the milk collection centre channel remains poor among small holder dairy farmers. To investigate some of the root causes, a study on formal milk marketing and the factors affecting its adoption was conducted. Seventy-one (71) smallholder dairy farmers from Chongwe district were both randomly and purposively interviewed. Descriptive statistics were used to analyze the adoption decision.

The results indicated that continued market access, quantity of milk sold and the seriousness of the buyer, market information and technical assistance packages provided by the milk collection centre were the most important determinants of the adoption of milk marketing through the milk collection centre (MCC) channel. Other factors identified to affect the adoption decision were land tenure system, being a member of a co-operative and the head's experience in dairy and service or professional information.

Four milk marketing channels were identified in the district. Of the interviewees 71.8% supplied the M C C , 11.3% sold directly to consumers, 9.9% supplied the supermarkets/processors and 7% sold their milk to the marketers and other retailers. The formal market share (MCC and supermarkets/processors) accounted for 81.7% of the milk marketed in 2007/8.

It is therefore recommended that assistance to establish milk collection points and access to markets, educational and training programmes, enhancement of women's participation and establishment of realistic credit facilities should be facilitated. Timeliness of payment procedures by MCCs should also be improved.

Producer co-operatives or associations are identified as being essential to dairy development. Dairy farmers need to organize themselves to overcome the problem of collection, transport, processing and marketing of milk. Organization is also important to enhance the bargaining power of the individual small holder to achieve a strong economical and social influence to ensure a fiill exploitation of the profitability in their dairy enterprise.

Chikobola Mulanga Musaka The University of Zambia, 2009

Supervisor: Mrs. R. Lubinda

V

CHAPTER ONE INTRODUCTION

1.1 Background

About 50 percent of the Zambian rural population depends on agriculture as a major

source of livelihood; the majority of which are small scale farmers (National Agricultural

Policy, 2004). They are the major contributors to food yet they are the poorest. For these

farmers ensuring food security has become a constant preoccupation since 83 percent of

rural inhabitants are poor, and 71 per cent of them are extremely poor (IF A D , 2003). This

means that if the millennium development goal of reducing poverty and hunger is to be

achieved by 2015, it is important that the development programs focus on small scale

farmers.

The development of the dairy sector by encouraging commercial milk production of

smallholder farmers is one of the strategies that may be used to reduce rural hunger and

poverty through income generation. Dairy development can be a source of broad based

economic development because it is labor intensive and is important in absorbing the

underemployed, improving incomes and spreading benefits broadly in the rural

population (Omiti and Muma, 2000). Besides, manufacturing and commerce depend

upon the dairy sector as a source of raw materials and market for manufactured goods

(e.g. milk processing, feed, drugs/chemicals and other dairy inputs).

In addition, there are various trends in motion that have currently increased interest in

dairy production and marketing in Zambia. Increases in population, incomes and

urbanization generate more rapid growth in demand for dairy products (Sng, 2002;

Delgado et al, 1999). Underutilization of capacity by the dairy processing companies due

to deficits in milk supply has also lead to imports of reconstituted milk powder by some

milk processing companies (Neven et al, 2006). One of the major efforts put in by the

government to develop the dairy sector has been the liberalization and deregulation of the

dairy market. This has presented various marketing opportunities were farmers have

1

various marketing channels from which to choose; thus avoiding exploitation by traders

and negative effects of govemment monopolies. Farmers and agribusinesses can now

access the wider regional market hence complimenting the smaller domestic market. In

addition, there are significant opportunities to develop small scale processing plants to

serve smaller urban settlements and milk sheds.

It should be realized that an inefficient marketing system can act as a barrier to

development. It is therefore important that a well functioning dairy market system is

developed in order for the small holder farmers to take advantage of the existing

opportunities. This can also stimulate dairy consumption and production thus allowing

the dairy sector to realize its full potential to provide food and stimulate broad based

agricuhure and economic development. A well functioning and sustainable market is one

that ensures a continuous flow of information regarding the demands of consumers and

the requirements of processors and producers. This facilitates price formation that results

in incentives to producers and acceptable prices to consumers. However most of the

development programs so far have been geared to and concerned with production, with

marketing aspects receiving little attention.

In Zambia, the milk marketing system is usually classified as formal or informal. In the

formal markets, processors are the channel captains and the most important players are

Pamalat (Zambia) limited and Finta Danish Dairies Limited. The informal market refers

to all other market structures existing outside the formal market which basically consist

of farmers selling raw milk to consumers in rural areas (Neven et al, 2006).

The present govemment policy is to encourage commercial milk production by

smallholder farmers through Milk Collection Centers (MCCs) in order to increase

production. Beside govemment activities, Non Governmental Organizations (NGOs)

have been working to improve the social economic conditions of the rural poor by

organizing groups of smallholder farmers, providing credit, and other support to ensure

stability in the production process and overall improvement in living conditions. With

this support it is anticipated that the production levels will increase and hence there is

2

need to market the surplus milk.

A study conducted on smallholder farmers showed that milk marketing through MCCs

has a positive impact on milk output volume because it is a reliable market option

(Mukumbuta and Sherchand, 2006). Milk marketing through MCCs can stabilize

household income through access to credit and inputs, provision of good extension and

veterinary services, improved market access and other incentives as opposed to the

informal market. Compared with the formal market, the informal market may also have

advantages such as reducing transport costs and time wasting involved in marketing milk

to far off areas; reduction of losses due to spoilage; and prompt payments for the milk

sold (i.e. payment is cash on delivery).

Marketing is important to stimulate and sustain production hence the need for

accessibility and availability of a well functioning marketing system. In an attempt to

develop a well functioning marketing system for milk, the Zambian Govemment, donor

agencies and private sector (NGOs and Processing companies) set up Milk Collection

Centers (MCCs) as a means of increasing smallholder farmer participation in the forma!

market system and accessibility to both the domestic and wider regional markets.

1.2 Problem statement

Despite setting up MCCs, a large quantity of milk in smallholder dairy farms is still sold

through informal channels to rural markets or consumed by the producers. An estimate

across the 17 MCCs showed that 60% of the milk from smallholder farmers is sold in the

informal market and only 40% enters the formal market (Mukumbuta and Sherchand,

2006). Of great concern is the underutilisation of the MCCs yet they could bring about a

turnaround not only in the livelihood of smallholder farmers but the dairy sector as a

whole.

3

:h has focused on understanding the structure of the dairy marketing system

lumber of participants. Phiri (1992) studied trends in milk marketing whose

ised the need to provide credit facilities, marketing infrastructure and good

veterinary services. Also, Neven et al (2006) did a study on adoption in

/ince of Zambia. This study showed the importance of suitable price

;mes, involvement of all relevant stakeholders and the need to be clear on

5 to include in the business model. However, little was done to investigate

ind tenure type and the availability of alternative maricets on adoption

less favored areas, where market options are limited, famers cannot depend

chanisms to cope. Chongwe district is chosen in view of the fact that it is

(the main market) with various market options and employment

In Monze market opportunities are not as many compared to Lusaka where

ipt to sell their milk directly to processors, supermarkets etc. The impact of

can as well be estimated since households would have engaged in more

employment.

s

al objective

factors affecting smallholder dairy farmers' choice of milk marketing

c objectives

itify the various milk marketing channels and the extent of use. I out the farmer's perceptions about the various marketing channels in the

itify the socio-economic, institutional and attitudinal factors influencing

)ption of marketing through the Milk Collection Centre channel in the

4

Recent research has focused on understanding the structure of the dairy marketing system

and type and number of participants. Phiri (1992) studied trends in milk marketing whose

study emphasised the need to provide credit facilities, marketing infrastructure and good

extension and veterinary services. Also, Neven et al (2006) did a study on adoption in

southern province of Zambia. This study showed the importance of suitable price

incentive schemes, involvement of al! relevant stakeholders and the need to be clear on

which farmers to include in the business model. However, little was done to investigate

the role of land tenure type and the availability of alternative markets on adoption

behaviour. In less favored areas, where market options are limited, famers cannot depend

on market mechanisms to cope. Chongwe district is chosen in view of the fact that it is

near Lusaka (the main market) with various market options and employment

opportunities. In Monze market opportunities are not as many compared to Lusaka where

farmers may opt to sell their milk directly to processors, supermarkets etc. The impact of

off-farm work can as well be estimated since households would have engaged in more

off-farm wage employment.

L3 Objectives

1.3.1 General objective

To determine factors affecting smallholder dairy farmers' choice of milk marketing

channel.

1.3.2 Specific objectives

• To identify the various milk marketing channels and the extent of use.

• To find out the farmer's perceptions about the various marketing channels in the

district.

• To identify the socio-economic, institutional and attitudinal factors influencing

the adoption of marketing through the Milk Collection Centre channel in the

district.

4

1.4 Rationale

Awareness of the factors affecting the farmer's adoption of various milk marketing

channel is essential to successful development and implementation of dairy marketing

policies in Zambia. It also adds to the existing body of knowledge, because it is of the

essence to know what other supporters can do to better support the smallholder dairy

farms and their emergence.

1.5 Organization of the Report

This research report is divided into five (5) chapters and is laid out as follows. Chapter

one highlights the background information about the study. It covers the problem

statement, objectives, and rationale of the study. Chapter two focuses on literature review

in which the meaning of key terms, smallholder dairy production in Zambia, significance

of milk marketing, types of dairy marketing in Sub- Saharan Africa and the variables

likely to affect choice of channel are discussed. Chapter three looks at the research

methodology that was used for the study. It encompasses the description of the data

collection procedure, sampling design and data analysis. Study findings are presented and

discussed in chapter four and the paper concludes with chapter five which contains the

study conclusions and recommendations.

5

CHAPTER TWO LITERATURE REVIEW

2.1 Introduction

This chapter reviews relevant literature on definitions of key terms, smallholder dairy

production in Zambia, significance of milk marketing, types of dairy marketing systems

in Sub-Saharan Africa and the variables likely to affect adoption of marketing channels.

2.2 Definitions of Key Terms

Following Rogers (1995), adoption can be defined as a decision to make full use of an

innovation as the best course of action once the individual has known and assessed the

attributes of the innovation. Most empirical studies using econometric models often relate

the adoption decision to households and technological characteristics. Numerous studies

have found that constraints imposed by these factors have discouraged technology

adoption (Umali and Schwartz 1994; Nicholson et al, 1999). These factors influence the

awareness, availability, costs, benefits and risks associated with different livestock

technologies and management practices (Benin et al, 2003).

Kaynak (1985) defined a marketing system as "the sequence of transactions and

commodity movements between the producer and the ultimate consumer". Such a

sequence includes bulking (or assembly) and distribution. Marketing is recognized as one

of the main constraints to the development of dairying in Sub-Saharan Africa (SSA), yet

there has been little research on the subject and very few researchers have firsthand

experience in dairy marketing. For instance, among the positive factors that have

contributed to the development of smallholder dairying in Malawi had been a

comprehensive milk marketing strategy. In this paper, a marketing channel for milk will

refer to either the formal or informal marketing system through which milk passes as it

leaves the point of production through intemiediaries to the ultimate consumers.

6

Marketing services are critical to rural as well as urban food security. In the past many

interventions were geared to increasing the production, much less however, in processing

and minimal in marketing, transport and other supporting services essential for linking

the producer and the consumer. The main marketing functions are normally classified

into three categories: exchange functions, which are further subdivided into buying and

selling functions. The buying function also includes product assembly, i.e. collection

fh)m producing sites; physical functions, which comprise transportation, processing and

storage functions; and facilitating functions, comprising standardization, financing, risk-

bearing, market intelligence (information-gathering), and management functions.

A Smallholder dairy farmer will refer to farmers who use intermediate-capital intensive

technologies or keep dairy cows under the traditional and/or semi-traditional husbandry.

These farmers mostly depend on unpaid family labour use in their dairy enterprise.

2.3 Smallholder Dairy Production in Zambia

Dairy production is important to improving the food security of small holder farmers as

well as providing a sustainable way of earning income. The smallholder sector offers the

greatest potential for the improvement of milk production in Zambia as it holds the

largest number of cattle. Despite this potential, it contributes not more than half the

national production. Given the potential that it holds, it should be possible to increase the

output of milk from this sector and help satisfy national milk needs (MACO, 2006).

2.3.1 Constraints to Smallholder Participation in Dairy Production

The Zambian smallholder dairy farmers own over 90% of the traditional herds but an

insignificant percentage of milk from these herds flows through the formal processing

channels. Among the constraints that have been affecting small holder participation in the

formal channels has been lack of investment in modem dairy practices (including

volume) and technologies, the prevalence of cattle diseases, lack of resources to improve

cattle health and nutrition, and globalization and competition with powder-milk. Over-

7

looked and neglected the smallholder dairy farmers have been unable to break into the

formal milk market (Mukumbuta and Sherchand, 2006). This means therefore that the

introduction of commercial dairy cows (improved breeds) in the traditional livestock

subsector is important to enhance competitiveness because significant productivity gains

(litres/cow) can be obtained with pure breeds as opposed to traditional breeds.

2.4 Significance of Milk Marketing

Studies have shown that the macro-economic reforms implemented or being implemented

in Eastern and Southern Africa, have increased the competition for marketing functions

(such as collection, transportation, processing and distribution/retailing) and have

resulted in increased income and employment opportunities, esp«:ially for small-scale

milk traders (Omiti and Muma, 2000). Many small-scale farmers sell less than 120 liters

of milk per day, but this business activity enables them to earn a daily income equal to

approximately twice the national average (Omore et al, 1999; Staal, 2002), which

represents a significant contribution to poverty reduction.

The fact that farming families can earn a regular income throughout the year from milk

makes it a more attractive enterprise than others; but the search for stable market outlets

by producers is complicated by significant seasonal variation in milk production and

dairy product consumption (Debra and Berhanu, 1991). Barriers to smallholder

participation in dairy production range from availability and cost of animals to the labour

needed to bring products to market. Despite the potential, smallholder participation in

market-led dairy development has not been widespread in SSA, changes in sectoral and

macroeconomic policies are frequently necessary but not sufficient, to provide the

requisite incentives for smallholder farmers to participate in markets.

Future interventions in the dairy sector should be maricet or demand driven to promote

economic development. The development of the dairy sector is an efficient tool in this

context as it generates a continuous flow of income, diversifies risk, improves utilization

of resources, and generates employment also outside the farming community because of

8

the need for collection, transport, processing and marketing (Huss-Ashmore and Curry,

1992). A market orientated agricultural production will help in generation of income and

utilization of surplus and the available resources for the development of the farmers. For

the society it would secure food supply to the rapidly growing non-farming community;

create employment and promote economic development and provide import substitution

or even products for export.

2,5 Types of Dairy Marketing Systems in Sub-Saharan Africa

A study on dairy marketing systems in six SSA countries (Kenya, Zimbabwe, Tanzania,

Malawi, Ethiopia and Madagascar) showed that all have parallel formal and informal

marketing systems (Brokken and Senait, 1992). The two marketing systems identified are

discussed briefly stating their advantages and disadvantages.

2.5.1 Informal Marketing System

This is a marketing system whereby commodities are marketed without laws and

regulations and usually requires no licensing. However, in some cases distributors are

required to have licenses, a requirement that is, in many cases, difficult to enforce and is

often circumvented. The informal marketing system is limited to the remote, peasant

sector where small surpluses of unprocessed and unpackaged fresh milk or sour milk are

sold to ultimate consumers by producers or through small milk traders. Small milk traders

are those individuals who purchase relatively small quantities of milk from smallholder

farmers and distribute them in markets elsewhere (Brokken and Senait, 1992).

The advantages of the informal system are that: payment is prompt as payment is cash on

delivery, costs i f any are involved between the producer and consumer are minimized;

prices of milk under this system are determined by supply and demand forces; no

processing costs are involved; with short marketing channels and potentially good prices

for producer and consumer, costs are low; and there is limited competition with imported

products (ibid).

9

The disadvantages include: adulteration of milk by the producer as the consumers

normally have no means of testing the milk before purchase; risks of diseases such as

Tuberculosis and brucellosis incase milk is not boiled before consumption; the

perishability nature of the product that results into high incidence of milk spoilage due to

the long distances and time taken by the milk vendor to collect and distribute milk to

consumers; lack of payment for quality and fat content; and lack public health control

(Brokken and Senait, 1992).

2.5.2 Formal milk marketing system

This is a form of marketing whereby laws and regulations regarding sale of milk and milk

products stated are observed. The formal system consists of integrated commercial

organizations for collecting, processing, packaging and distributing milk and other dairy

products. It usually includes cooperative or parastatal organizations which operate under

a number of regulations and a M C C is an example of this system.

The advantages of the formal milk marketing system are that: the system consists of

MCC that provide cooling facilities to reduce spoilage of milk; household incomes are

stabilized through access to inputs and credit e.g. loans to purchase improved cow breeds

and equipment and repayment through monthly deductions; provision of good extension

and veterinary services; and the fact that it provides a more stable and reliable market

access as compared to the informal market (Brokken and Senait, 1992).

The disadvantages of formal milk marketing, among others, include irregular and delayed

payments in most cases and controlled prices that may be as low as half those in the

informal system which operates under the forces of supply and demand (ibid).

2.6 Variables likely to affect Adoption of Milk Marketing Channel

Various studies have brought to light variables that can be determined to ascertain their

effect on adoption of technologies. They have been categorized into institutional factors

resource (economic) factors, and attitudinal factors (Bailey, 2001; Neven et al, 2006).

10

2.6.1 Institutional Factors

The institutional factors include credit availability, input and output services, level of

education and other policy related interventions like govemment extension services.

Adoption of milk marketing through the formal channels is positively influenced by

credit availability. Farmers who want credit are more likely to sell their milk through

formal channels to improve their credit rating. Formal marketing channels are also a

significant source of other market information for farmers particularly with regard to

concentrates, veterinary clinical drugs, and artificial insemination services and forage

seeds. Consequently, they determine in many ways what breed of cattle farmers should

keep and type of concentrates to feed in response to market demand. Formal systems can

thus unwittingly contribute to the failure or success of dairy industry.

With reference to education, farmers marketing their milk through the formal market

systems are likely to be more knowledgeable than farmers using informal market

channels. This is because farmers who are educated are able to adopt and apply more

efficient crop and animal production methods to improve their productivity. The role of

extension is also important because it provides education, training, useful information

and technical advice, the factors that have been shown to influence the farmer's adoption

and farm management behavior among other factors (Howard and Cranfieid, 1995).

2.6.2 Resource (Economic) Factors

The resource (economic) factors include farm size, family labour, labour, number of

cows and average milk production per cow. The number of cows milked and average

milk production per cow positively influence adoption of milk marketing through formal

channels. This suggests that the probability of milk marketing through the formal market

increases with increase in the number of cows milked and milk yield per cow per day.

This is because a large quantity of milk is sold and the fact that formal channels provide a

continued market access to the milk producers.

11

Farms with large land sizes size influence positively the adoption of milk marketing

through the dairy formal market if a large number of cows are owned. Also the

probability of adopting formal channels is increased if household head worked off-farm.

Off farm employment increases farmers' exposure to opportunities for extra daily cash

hence disposal of milk through formal markets which pay monthly for milk delivered.

Off-farm employment provides extra income needed to buy feed, drugs, hired labour and

any other expenses for the dairy enterprise. Hired permanent labour positively influences

the marketing of milk through formal channels. Permanent labour employment leads to

more efficient utilization of resources and hence more milk production.

2.6.3 Attitudinal Factors

The individual's investments risk is an attitudinal factor. Any factor that could lower or

increase expenses is a source of risk to the economic performance of the dairy business

(Bailey, 2001). Some of these risks are: milk prices, purchased feed prices, hired labour,

crop/ forage production among others. Baidu-forson (1999) concluded that adoption is

strongly affected by the individual's investment risk attitude and contact with extension.

Dairy farmers need to budget each month for feed purchases, hired labour and veterinary

and artificial insemination expenses and any other expense (Bailey 2001). Cash flow

problems occur when milk prices fall below expected levels and given that low milk

prices are offered then informal markets the preferred options. This therefore means that

policy related intervention like govemment extension agent as a source of extension

information can have a relatively small negative and insignificant effects on adoption of

milk marketing through the formal market.

This study will focus on the role of land tenure type and the availability of alternative

markets (the two institutional factors) on adoption behaviour. Other factors specified

above and relevant to the study will also be analyzed.

12

CHAPTER THREE RESEARCH METHODOLOGY

3.1 Introduction

This chapter outlines the methods and procedures used to achieve the stated goals. It

gives information on the area of study, research design, sampling procedure, data

collection and data analysis tools that were used in the study.

3.2 Area of study

This study was conducted in Chongwe district. East of Lusaka province covering farmers

living within a 20km radius around the Palabana M C C . This area was selected because it

comprised not only village farmers but also smallholder farmers who have settled there

from various urban areas. Chongwe district was also chosen because of the presence of

project activities of the Ministry of Agriculture and Cooperatives (MACO) through the

District agricultural coordinators office, Kasisi Agriculture Training Centre, Heifer

International Zambia, Land O' Lakes and the Palabana Dairy Training Institute where

there is a MCC.

3.3 Data collection methods

A sample of 71 farm households was selected from farm households who own dairy

cows. Respondents in the sample were both randomly and purposively selected and a

farm household was used as a sampling unit. Both primary and secondary data was

collected in this study. Primary data was collected by means of structured questionnaires

administered as interviews. Secondary data was collected from various institutions such

as the Ministry of Agriculture and Co-operatives (MACO), Central Statistical Office

(CSO), NGOs, relevant publications and the internet.

13

3.4 Data analysis

Data analysis was done using descriptive statistics to describe the social background,

farm characteristics, livestock ownership and other important variables. This was done to

explain the relationship between the adoption of a milk marketing channel, which was the

discrete dependent variable and the independent variables. A l l analyses were performed

using a computer statistical package of social sciences (SPSS) 11.0.

3.5 Limitations of the Study

In this research, a sample size of 80 small scale farmers was supposed to be sampled.

Covering all sampled farmers was not possible because of the resources to do that were

limited.

14

CHAPTER FOUR STUDY FINDINGS AND DISCUSSION

4.1 Introduction

This chapter presents and discusses the study findings. It begins with discussion of the

demographic characteristics of the respondents followed by the various types of milk

marketing channels in the district. The farmers' perception of the various milk marketing

channels will be presented and then a discussion of the factors affecting the adoption of

milk marketing channels will be explained later.

4.2 Demographic Characteristics

Table 1: Distribution of Farmers by Age and Sex

Age group

(years)

Sex of household head

Total Percent

Age group

(years) Female Male Total Percent

21-30 0 6 6 8.5%

31-40 2 12 14 19.7%

41-50 1 16 17 23.9%

51-60 2 10 12 16.9%

61 & Above 0 22 22 31.0%

Total 5 66 71 100%

Percent 7% 93% 100%

Source: Own Survey Data (2008)

Most of the respondents in the study (93%) were male as compared to (7%) females that

constituted the sample. This means, therefore, that there were more male headed farm

households than female headed farm households. The majority of the farmers (31%) had

ages between 61 years and above. About 24% constituted those that were between 41 and

50 years while 20 % were between 31 and 40 years. Further, 17% constituted those that

were between 51 and 60 while 8.5% were between 21 and 30 years respectively (see

Table 1).

15

Table 2: Distribution of Farmers by Education Levels Education Frequency Percent

Primary 3 4.2%

Secondary 17 23.9%

Tertiary 51 71.8%

Total 71 100%

Source: Own Survey Data (2008)

In terms of education, about 24% of the farmers had reached formal school up to

secondary level, 4.2% up to primary and 71.8% up to tertiary level. Since the majority

(95.7%) of the farmers had reached secondary and tertiary levels, the implication is that

they may be able to comprehend new technologies and practices easily (see Table 2).

Table 3: Distribution of Dairy Cattle by Breed

Cow Breed Frequency Percent

Mixed 38 53.5

Pure 30 42.3

Traditional 3 4.2

Total 71 100.0

Source: Own Survey Data (2 tOOS)

About 54% of the dairy cows reared by the farmers were mixed breeds, 42% pure breeds

and only 4% accounted for traditional breeds (see Table 3). This means therefore that

most farmers are likely to produce very high milk yields per cow as a result of good

reproductive performance. The implication of the high milk yields per cow is that most

farmers are likely to sell their milk through the formal market channels. The high

percentage of pure and mixed dairy cow breeds may be attributed to the project activities

of Heifer International Zambia and Land O' Lakes on smallholder farmers in the district

aimed at increasing milk yields and incomes by introducing improved dairy cows.

16

4.3 Types of Milk Marketing Channels and the Extent of Use

Four milk marketing channels were identified in the district. Of the interviewees in the

sample the majority of the farmers (71.8%) supplied their milk to the MCC, 11.3% sold

directly to consumers, 9.9% supplied the supermarkets/processors directly and the

remaining 7% sold their milk to the marketers and other retailers. The formal market

share which refers to the volume of milk marketed by producers through the M C C and

the supermarkets/processors channels is important. It accounted for about 81.7% of the

milk marketed in 2007/8. The informal market share accounted for about 18.3% of the

milk marketed (Table 4), implying that the formal market traders were more popular in

marketing milk from the smallholder dairy producers in Chongwe District.

Table 4: Milk Marketing Channels

Marketing channel Frequency Percent

Marketers & Other Retailers 5 7.0% Consumers Directly 8 11.3%

Supermarkets/Processors 7 9.9% Milk Collection Centre 51 71.8% Total 71 100%

Source: Own Survey Data (2008)

4.4 Farmers' Perception of the Various Milk Marketing Channels

Market access, quantity of milk sold and the seriousness of the buyer were the most

important determinants of milk marketing through the M C C (see Table 5). Market

reliability and stability was the most frequently reported and highly ranked consideration

in the choice of a marketing channel among the farmers. It is apparent from Table 6 that

households which sold their milk through the MCC experienced a more secure and

continued market access throughout the year. Quantity of milk sold was another

important factor reflecting choice of marketing channel. It is also clear from the Table

that about 77.8% of the producers sold their milk through the M C C because there was no

limit as to the quantity of milk to be supplied.

17

Table 5: Characteristics in Choice of the Marketing Channel

% of farmers indicating which Marketing Channel they consider Better for them and Why

Marketing channel Marketers & Other Retailers.

n=5

Consumers Directly

n=8

Supermarket s/

Processors n=7

Milk Collection

Centre n=51

Pays higher price 1.4% 4.2% 5.6% 33.8%

More secure & continued market access

1.4% 1.4% 8.5% 71.8%

Larger qty of milk sold

1.4% 8.5% 9.9% 71.8%

Pays more fore higher quality

- - 8.5% 49.3%

Provides technical assistance

- - - 26.8%

Provides credit - - - 45.1%

Easier to sell to (close, familiar)

4.2% 11.3% 5.6% 66.2%

Serious business buyer

1.4% 7.0% 8.5% 67.6%

Respect to payment agreement (less risk)

7.0% 11.3% 9.9% 47.9%

Faster payment 7.0% 11.3% 9.9% 33.8% Source: Own Survey Data (2008)

The MCC followed a procedure of monthly payment to dairy producers but producers

who sold their milk through the centre complained of delayed payments. About 66% of

the interviewed households who sold their milk through MCC indicated delayed payment

as one of the major problems they faced. This was certainly not the case for those who

sold to supermarkets/processors, marketers and other retailers and consumers directly.

Although supermarkets/processors followed the same monthly payment procedures as the

MCC, farmers received their payments promptly. Marketers and other retailers and

consumers directly effected payments immediately at the time of collecting milk,

implying that the two were more effective than the MCC in timeliness of payments to

producers.

18

4.5 Factors Affecting the Adoption of Milk Marketing Channels

The factors identified to influence the adoption of milk marketing through the M C C in

the district are classified in to socio-economic and institutional and attitudinal factors.

4.5.1 Socio-economic Factors

Physical capital elements are more prevalent in the MCC channel. Bicycles and milking

cans are the most common assets invested by farmers in all the channels (Table 6). This

shows why most farmers take their milk to the collection centre using bicycles as the

most reliable mode of transport. Motorized vehicles, feed storage tanks, animal sprayers

and milking parlor with cement floor are completely absent in the marketers and retailers

channel. A procedure of monthly payment to dairy producers by the M C C as opposed to

payments at time of collecting milk is a possible explanation of why producers who sold

their milk through formal channels accumulated a lot of physical capital. This procedure

allows farmers to have good investment plans.

Table 6: Physical capital differences between the various milk marketing channels

Farm Characteristic Marketers &

Other Retailers

n=5

Consumers Directly

n=8

Supermark ets/

Processors n=7

Milk Collection

Centre n=51

Farms with motorized vehicle

- 2.8% 8.5% 22.5%

Farms with bicycles 5.6% 9.9% 8.5% 69.0% Farms with a feed storage tank

- 1.4% 8.5% 16.9%

Farms with animal sprayer

- 7.0% 8.5% 57.7%

Farms with milking cans 4.2% 9.9% 9.9% 70.4% Farms with milking parlor with cement floor

- 8.5% 8.5% 45.1%

Source: Own Survey Data (2008)

Descriptive statistics of sample farmers and the variables used are presented in Table 7.

19

Table 7: Characteristics of Surveyed Households

Variables

Milk Collectio n Centre

N=51 (mean)

Supermar ket/

Processors N=7

(mean)

Consume rs

Directly

N=8 (mean)

Marketer s & Other Retailers

N=5 (mean)

Total

N=71 (mean)

Household size 6.61 7.57 6.25 7.00 6.69 Age of hh head (years) 50.42 43.18 51.71 47.77 49.66 Sex of hh head (l=male) 0.94 0.86 0.87 1.00 0.93 Education level hh Head (years) 13.84 15.14 10.00

12.60 13.45

Number of hh members who earned off-farm income 1.60 3.57 1.50

1.20 1.75

Head's experience in dairy (years) 17.00 4.57 16.87 12.80 15.44 Farm size (hectares) 53.04 143 38.44 36.80 59.13 Distance to MCC (Km) 5.35 5.71 5.25 11.60 5.82 Number of cows owned (heads) 6.11 35.71 4.37

3.60 8.66

Herd size (Cattle) 15.24 65.86 12.63 11.40 19.66 Experience with the service or professional information (years) 11.37 5.86 9.86

10.60 10.61

Keeps production records (l=yes)

0.94 1.0 0.625 0.40 0.87

Average milk production per cow/day in dry season (liters).

6.86 6.71 5.75 5.75 6.66

Average milk production per cow/day rain season (liters)

8.39 8.71 6.88 7.50 8.20

Cooperative member (l=yes)

0.80 0.43 0.50 0.20 0.69

Total land area used for cropping (hectares)

8.30 17.57 8.13 8.80 9.23

Have a land title (l=yes). 0.92 1.00 1.00 1.00 0.94 Source: Own Survey Data (2008)

20

The majority of the households (93%) are male headed households and the average age of

a household head is 49 years from the total sampled farmers. There was no major

variation in the average household size of the farmers in the different marketing channels.

The average household size was however lower in those who sold their milk to

consumers directly. The total average household size was approximately 7 household

members. Households which have adopted the supermarket/processor channel and the

MCC channel had the highest level of education compared to those that sell their milk to

the consumers directly and to marketers and retailers. This is because farmers who are

educated are more likely to comprehend and adopt new technologies. Those who sold

their milk to the consumers directly had the lowest level of education (Table 7).

Differences could be noted in the average farm size across the marketing channels with

the highest belonging to those who adopted the supermarket/processor channel (143ha)

followed by those for the MCC channel (53.04ha) and the lowest for those who sold to

marketers and retailers. Farmers with more land therefore had large herd size and higher

milk yields. This shows why. in terms of the average number of cows owned, those who

sell to supermarkets or processors had the largest number (36 cows) followed by those

who sell to the MCC (6 cows). The lowest number of cows was noted in those who

adopted the marketers and retailers channel (3 cows). Farmers with higher farm size and

larger heads focused more on dairy production and thus supplied the more secure and

continued market access (the supermarket'processor and M C C channels). The total

average farm size for the sample was 59.13hectares with about 9.23hectares of the total

used for cropping (see Table 7).

On average from the total sample about 2 household members earned off farm income.

The highest number was noted in those who sold to processors (i.e. about 3 members)

and the lowest was for those who sold to marketers and other retailers where only one

member earned off farm income (Table 7). The main sources of off farm income were

generated from working as a civil servant, running a retail shop, provision of agric

services and working on commercial farms.

21

From Table 8 it can be noted that there was no major variation in the average milk

produced per cow per day both in dry season as well as in the rain season between the

farmers in the different marketing channels. The total average milk produced in both the

dry and rain season was 6.66 and 8.20 liters respectively.

4.5.2 Institutional Factors and Attitudinal Factors

About 100% of those who adopted the supermarket/'processor channel and 94% of those

who adopted the M C C channel kept records for their farm operations and transactions.

About 65% of those who sold directly to consumers and only 40% of the farmers who

sold to marketers and retailers kept records for their farm operations and transactions. Of

the interviewees in the study 87% of the farms kept records of production, use of inputs,

sales and/or profit and loss accounts. The implication is that farmer participation in

recordinti increased when farmers sold their milk throueh the formal market (Table 7>.

With reference to the head's experience in dairy and with the service or professional

information those who adopted the MCC channel had the highest years of experience and

the lowest was noted in those who adopted the supermarket/processor channel (fable 7).

Distance was more of an entrv barrier to those who sold their milk to the marketers and

retailers. Thev had the longest distance to the collection centre and thus were often

compelled not to sell their milk to the collection centre.

In terms of land tenure system 94% of the farmers had a land title for any part of land

they owned, which is conducive to modem dairv production in which investments in

dairy technology is a major consideration. Owning land therefore influenced positively

the marketing of milk through the formal marketing channels.

The results showed that the majoritv (80%) of the farmers who adopted the milk M C C

channel were members of a co-operative. Only 50% of those who sold to consumers

directly. 43% of those who sold to processors and 20% of those who sold to marketers

and retailers were members of a cooperative (fable 7). The implication is that being a

')7

member of a cooperative had an influence in adopting milk marketing through the M C C

channel. Hence cooperatives or associations are essential to dairy development and the

Magoye Smallholder Dairy Farmers Association in the southern province of Zambia is an

example of a highly productive and profitable rural business. Dairy farmers who organize

themselves into co-operatives or associations overcome the problem of collection,

transporting and marketing of milk (bulk selling). Organization also enhances the

bargaining power of the individual farmers to achieve a strong economical and social

influence to ensure a full exploitation of the profitability in their dairy enterprise.

Table 8: The Services Received By the Farmers

Services received by the Farm Number of farmers (n) =71

Supplied the MCC Frequency Total

Percentage Services received by the Farm Number of farmers (n) =71 Yes No

Frequency Total

Percentage

Technical Assistance

Did not receive this service.

2 5 7 9.9% Technical Assistance

Received this service.

46 18 64 90.1%

Credit Did not receive this service

26 15 41 57.7% Credit

Received this service.

25 5 30 42J%

Market Information

Did not receive this service

16 19 35 49.3% Market Information

Received this service.

35 1 36 50.7%

Source: Own Survey Data (2008)

From the sample survey about 90% of the farmers received technical assistance services,

42.2% received credit services and 50.7% market information services (see Table 8). This

shows that potential market information provided by buyers was another important factor

influencing choice of a marketing channel. It is evident that those adopted milk markeiinc

ihroueh the MCC were induced bv the market information and technical assistance

packaces orovided bv the MCC. Few farmers relied on formal information sources such

as the media, private firms or intermediaries and fellow farmers. Institutions reported

most freauentlv bv farmers as havinc connections with asriculiure in farmers" viiiaee and

the districts were the Ministrv of Acricuiiure. farmer oreanizations and NGOs. This

micht be a reflection of various oroiects implemented bv the research institutions.

CHAPTER FIVE CONCLUSIONS AND RECOMMENDATIONS

5.1 Introduction

This chapter presents the conclusion and recommendations of the study based on the

findings and interpretations of the study.

5.2 Conclusions

Marketing provides many social and economic benefits, and only by participating can the

producers fully utilize the opportunity for economic growth that is accessible in dairying.

Rural milk production can be significantly increased if access to market can be assured. It

is a general experience that an avenue for marketing the surplus milk provides the needed

incentive for increased milk production if effective linkages between producers,

processors and consumers exist.

This study was designed to determine the determinants of the choice of a marketing

channel. Descriptive statistics were employed to analyze and discuss the financial capital,

human and physical capital factors. The factors studied included household size,

education, marital status, farm size, off farm income and institutional factors and other

farm characteristics.

The results indicated that continued market access, quantity of milk sold and the

seriousness of the buyer, market information and technical assistance packages provided

by the MCC were the most impiortant determinants of milk marketing through the M C C

channel. Other factors identified to affect the adoption decision were land tenure system,

being a member of a co-operative and the head's experience in dairy and service or

professional information. In terms of extension services, a large proportion of the farmers

interviewed indicated that they had regular contact with extension workers from M A C O .

farmer organizations and non governmental organizations.

24

Four (4) milk marketing channels were identified in the district. Of the interviewees

71.8% supplied the M C C , 11.3% sold directly to consumers, 9.9% supplied the

supermarkets/processors and 7% sold their milk to the marketers and other retailers. The

formal market share (MCC and supermarkets/processors) accounted for 81.7% of the

milk marketed in 2007/8.

5.3 Recommendations

It is recommended that the govemment as well as the private sector's investment should

be directed towards the smallholder dairy production systems through assistance to

establish milk collection points and access to markets (in areas where distance seems to

be a barrier), educational and training programmes, enhancement of women's

participation in dairy production and the establishment of realistic credit facilities.

Timeliness of payment procedures by MCCs should also be improved.

Rural milk production can be significantly increased if access to market can be assured. It

is a general experience that an avenue for marketing the surplus milk provides the needed

impetus for increased milk production. It is recommended to establish a body that can

coordinate and promote dairy development, especially among smallholder farmers, if the

government's overall objective of improving the productive efficiency of the livestock

sector in a sustainable manner is to be achieved.

Producer co-operatives or associations have been identified as being essential to dairy

development. Therefore programs to improve and strengthen cooperatives can contribute

to the development of dairy industry and substantially contribute to alleviating poverty.

Dairy farmers need to organize themselves in co-operatives or associations to overcome

the problem of collection, transporting and marketing of milk. Organization is also

important to enhance the bargaining power of the individual small holder to achieve a

strong economical and social influence to ensure a full exploitation of the profitability in

their dairy enterprise.

25

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Bailey K (2001). The fundamentals of forward contracting, hedging and options for dairy producers in the North East. Staff Paper No.338, U.S.A.

Benin S, Pender J and Ehui (Editors) (2003) Policies for sustainable land management in the East African highlands. Socio-economics and Policy Research Working paper 50. Nairobi, Kenya. Pp 90-95.

Brokken R F and Senait Seyoum (1992) Dairy marketing in sub-Saharan Africa. Proceedings of a symposium held at ILCA, Addis Ababa, Ethiopia, 26-30 November 1990.

Debrah S H and Berhanu Anteneh (1991) Dairy marketing in Ethiopia: Markets of first sale and producers' marketing patterns. ILCA Research Report 19. ILCA (International Livestock Centre tor Africa), Addis Ababa, Ethiopia.21 pp.

Ucigado C, Roscgrani M , Steinfeld H, thui S, Lourbois C (1999) Livestock to 2020: The Next Food Revolution. Washington. D.C.: IFPRI; Rome: FAO: Nairobi. Kenya: ILRl.

1 loward W H and Cranfieid J (1995) Ontario beef producers' attitudes about artiticial insemination. Canadian Joumal of Agricultural Economics 43 (2): 305-314.

Hush-Ashmore, R. and Curry, J. (1992) Nutritional Impacts of Livestock Disease Control. International Laboratory for Research on Animal Diseases, Nairobi, Kenya.

IFAD (2003) Rural Poverty in Zambia. http//www. (Accessed, June 2008)

Jelan Z A and Dahan M M (1998). Monitoring Livestock Productivity in Malaysia. In: Trivedi K R (editor). International Workshop on Animal Recording for Smallholders in Developing Countries. ICAR Tech. series No. I, pp. 79-88.

Kaynak, E. (1985). World Food Marketing Systems: Integrative Staienieiit. i n . Kaynak, E. (ed). World Food Marketing Systems, Butterworths.

Ministry of Agriculture and Cooperatives Report (2006), Lusaka, Zambia

Ministry of Agriculture and Co-operatives (2004), National Agricultural Policy (2004-2015). October 2004, Lusaka Zambia.

26

Mukumbuta L and Sherchand B. (2006) Enabling smallholder prosperity: Zambia's smallholder Milk Collection Centers. Paper presented at the USAID Regional Consultation on Linking Farmers to Markets, Cairo, Egypt.

Neven D, Katjiuongua H, Adjosoediro I, Reardon T, Chuzu P, Tembo G and Ndiyoi M (2006) Food Sector Transformation and Standards in Zambia: Smallholder Farmer

Participation and Growth in the Dairy Sector. Staff paper 2006 - 18

Nicholson C F, Thornton P K, Mohammed L, Minge R W, Mwamwchi D M , Elbasha E H, Staal S J and Thorpe W (1999) Smallholder dairy technology: An Adoption and impact study. International Livestock Research Institute, Nairobi, Kenya.

Omiti J. and Muma M . (2000). Policy and institutional strategies to commercialize the dairy sector in Kenya. Occasional Paper 6/2000. Nairobi, Kenya

Omore A, Muriuki H, Kenyanjui M , Owango M and Staal S J (1999) The Kenya Dairy sub-sector: A rapid appraisal. Ministry of Agriculture (Kenya)

Phiri G B M (1992) Trends in milk marketing for small scale producers in Zambia.

Ministry of Agriculture, Lusaka, Zambia

Rogers E M (1995) Diffusion of Innovations. The Free Press. New York.

Sng K (2002) Dairy Enterprise Initiative for Zambia. Market Research Study. Report prepared for Land O Lakes, Lusaka Office.

Staal S (2002) The Competitiveness of Smallholder Dairy Production: Evidence from Sub-Saharan Africa, Asia and Latin America. National Dairy Development Board workshop: Nairobi, Kenya.

Umali D L and Schwartz (1994) Public and private extension: Beyond Tradition Frontiers. World Bank discussion papers. World Bank, Washington D. C , USA.

27

APPENDICES

28

Appendix 1: Questionnaire Questionnaire serial number.

Detetminants of Smallholder Daity Fatmets' Adoption of Vatious Milk Matketing Channels in Chongwe District

Department of Agricultural Economics (^Extension Education The University of Zambia

District name: 1. Fatm identification 1.1 District code dist 1.2 Constimency code const | | | | Constituenc)' name:

ward 1.3 Ward code 1.4 Farm code

_LJL Ward name: fatm I T I Name of the farm:.

1.5 a) Name of farm owner own, b) Sex of farm owner (0=Female; l=Male) c) NX^ch year was farmer owner bom (e.g. 1967)

1.6 Is the owner the main respondent? 0 = N o 1 = Yes

1.7 a) Name of main respondent tesp_ b) Relationship to farm owner (Codes at bottom of Table 2.1)

sex yob

town

tshipl i

Einsure that the main respondent is knowledgeable about the farm, and dairy production & marketing operations.

1.8 D i d this farm produce milk last year (October 2007 - September 2008)? Ptod | | 0 = N o -> Fill in questions 1.9 through 1.13 and End interview 1 = Yes

1.9 Response status (l=Complete; 2=Did not produce inilk; 3=Non-contact) status

1.10

1.11

1.12

1.13

Date of enumeration (dd/mm/yy)

Name of enumerator

Date checked (dd/mm/yy)

Name of field supervisor

daten

Enumerator code enumf

datec I I / I 1

_Supervisor code sup | | |

29

2. Nature of the Farm 2.1 Basics

2.1.1

2.1.2

2.1.3

2.1.4

Which year was dairy production started at the farm (e.g. 1947)

How far is the farm from the nearest market town?

2.1.5

2.1.6

2.1.7

2.1.8

2.1.9

2.1.10

hhOl

hh02[ How far is the farm from the main (surfaced) road?

km

hh03 km How long does it take to get to the main road by motorized vehicle in the a) Dry season (minutes)? b) Rainy season (minutes)? hh05

mmutes

minutes

For how many months in a year is the nearest main road accessible? hhO^ I ~]" oQths

What is the main economic activity for this farm? (Pick one only) 1 = Fruits and vegetables 3 - Grains hh07 2 = Livestock/dairy 4 = Other, specify:

How many farm labourers did the farm hire during the past 12 months a) Males? hh08| | | b) Females? hh09| | |

hhlO[ Who manages this farm? 1 = Farmer/owner 3 = Owner's child 5 = CO-owner of the farm 2 = Owner's spouse 4 = Farm manager 6 = Other, specify:

What is the sex of the one who manages this farm? (0=Female; l=Male) hhll

What is the roofing material for the main farm house made of? 1 - Iron/metal3 = Tiles 5 - Grass/straw hhl2| 2 = asbestos 4 = Corrugated iron sheets 6 = Other, specify:

2.1.11 What is the wall material for the main farm house made of? hhl3{] 1 = Burnt bricks 4 = Pole/bamboo 7 = Grass/straw 2 = Concrete blocks 5 = Pole and da^a 8 = Iron sheets 3 = Mud bricks 6 = Mud (mudhindo) 9 = Hard board

2.1.12 What is the door material for the main farm house made of? 1 = Std door frame & door 2 = Traditional hhl4

2.1.13 XXTiat is the floor material for the main farm house made of? 1 = Cement 3 = mud 5 = Other (specify) hhl5| 2 = Concrete 4 = Bear earth

2.1.14 Does the farm have running water/potable water in the house? 0=No l=Yes hhl6|

30

2.2 Dependence/Income

5.2.1. Fill in the Jollowing table income earned by farm members between October 2007 and September 2008.

List all income-earning members of the household/farm (i.e. those \with DM08=1 in Table 2.1 above)

How much income did ... earn from selling milk (ZMK)?

Enter H)' if none

How much income did ... earn from other farm activities (ZMK)?

Add across all other htm activities. Enter 'O* if none

How much income did ... earn from off-fiirm activities (ZMK)?

Add across off-farm all activities. Enter H)' if none

Ask only if IN03#0

What was ...'s most important off-farm activit}'?

See codes below MID Name INOl IN02 IN03 IN04 1 2

3

4

5

0£f-£atm income sources (IN04) t = o n smal lhoUer farm

2=on coimterci i i l fantt

3=in factory

4=in a mine

5=i>(hcr inJusirial wt>rk

(i=tcachtr

7=othcr civil scn'ant

8=clcrk

9=sh(>p attetidanl

10=non agricultural piece work

21 =agricuttural trading

22=Uvcstock trading

23=rttaJl tr /shop owner

2 4 = h a w k e r / v e « x J o r / m a r k e t e r

25=fm.-\vood/charcoal

product ion

26=carpcntrv

27=l)uikkr '

28=!(ical brewing

29=butchery(ail meats including

ganu.', c«K»ked o r unct*oked)

30—ag services (e.g. ploughing, planting, spraying)

31=millitig

32=oil prtK:e»sing 33=agro-processii\g

34=tailor

35=bicyclc repair .36=weaving 37=blacksmithing

3H=traditional dixrtor

.39=fishing and selling

40=|>rccit>us stone trtiniitg (sitiall scale)

41 =:t»fhcr (specify)

2.3 Otganizadonal Capital

2.3.1 Are you a member or partner in a (0=No; 1 =Yes).

a) Cooperative hhl7| | b) Association/farmer group hhlS

2.3.2 Does your farm collaborate with other farms in the following activities (0=No;

1-Yes).

a) Buyinj? inputs hhl9l i b) Markenne' of milk hh20i' i

2.3.3 Five years ago. did you belone to more, less of the same number of farmer

oreanizaaon.''

1-More 2-Less3-Same 4=Not aoDlicabie hh21i

31

2.3.4 Fill in the follomng table about the services received by the farm and their providers.

How did Did you use or Has this farm Which year Who is/was Askoofy if you receive this ever received did you the most SR03=2 receive service during assistance with or info on ... ? 0=No-^ Go

first receive help/info on...?

important supplier or organizer of this service?

Is the farmer org. still active?

(info on) this service?

the past year (October 2007 — September 2008)?

to next See service Enter year See codes 0=No codes 0=No

Service and its description l=Yes (e.g. 2001) below l==Yes below l=Yes Service Description SROl SR02 SR03 SR04 SR05 SR06

1 Technical

1 Assistance Credit

z Services

3 Marketing Information

Codes for service provider (SR03)

l=l'"elIow fanner(s) 2=l-anncr organization 3=Private firrn(s) or intermediaries

4=C;overament department 5=NCiO or project 6=Bank

Codes for mode of service delivery (SR05) 1—I nformal conversation 2=Radio program 3=Pamphltt/newspaper 4=Woritshop

5=l-ield Day 6 =IX'monstrati<)n plot 7 =Other (specify)

2.4 Household Daily Expenditure & Consumption

3.6.1 Fill in the follomng table of how much the household spent on the following items

Item Amount (ZMK) 1 School fees 1" Term 2"''Term 3"" Term 1 School fees

2 Clothing & foot wear Last 1 month Last 12 months 2 Clothing & foot wear

3 Housing expenses I ,flst 1 month Last 12 months 3 Housing expenses

4 Spent on food and/or consumed

Last 1 month Last 12 months 4 Spent on food and/or consumed

5 Spent on/consumed from own produce

Cash purchases last 1 month Own produce last 1 month 5 Spent on/consumed from own produce

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2.5 Physical Capital/Assets

2.5.1 Fill in the following table about the farm's ownership of livestock and non-livestock assets.

Asset tyj •x

Does the farm have . . . ? 0=No^ Go to next asset l=Yes

How many ... does the farm own?

Which year was the newest acquired? (e.g. 1999)

What is die current value ofaU ...? (ZMK)

How many did the household have in September 2003?

Asset Name/description ASOl AS02 AS03 AS04 AS05 1 Motor vehicle 2 Bicycle 3 Milking parior with

cement floor 4 Milking cans 5 Computer 6 Scale 7 Feed storage tank

'..6 Si«e of Daily Opetation

2.6.1 What is the total number of milking cows you own? hh22.

2.6.2 O f the total number how many cows do you miUc? Iili23.

2.6.3 Fill the follomng table about the farm's cattle breed, number of cows, and amount of milk produced per cow.

What is the average number of animals you have been milking for the past?

[enter "0' if not applicable]

What feeding practice arc you currently using? 1 =zero grazing 2=free range 3=dairy grazing

What is the average amount of milk produced per cow per day in liters

[enter '0' if not applicable]

Bteed lyr 2yf8 3 yrs Feeding practice

Amount during dry season

Amount during rainy season

1. Mixed

2. Pure

3. Traditional

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2.7 Land Holding and Use

2.7.1 How many hectares of land do you or your spouse own? hli24_

2.7.2 D o you have a land tide for any part of land you or your spouse own? 0=No l=Yes hh25_

2.7.3 D o you rent any land? 0=No -> Go to question 2.7.5 1 =Yes lili26

2.7.4 If yes, how many hectares do you rent? hli27

2.7.5 What is the total land area used for cropping? hli33

2.8 Production and Milk Sales

2.8.1 D i d this farm supply milk to the milk collection center last year (Oct 2007-Sept 2008)?

0=No -> Go to question 2.8.4 1 =Yes hh37|

2.8.2 Which year did the farm start supplying the collection center (e.g. 1999)? / / /

2.8.3 Is the milk collection center the main buyer of this farm's milk? 1 =Yes ^ Go to question 2.8.5 0=No hh54

2.8.4 If no, who are the main buyers of the farm's milk? Iili55|]

1 = Marketers and other retailers 5= Big hotels 2= Wholesalers 6= Supermarkets/processors 3= Consumers directiy 7= None (was not selling) 4= Restaurants

2.8.5 What is the most important criterion you use to decide who to sell to? hh56|

1 = Trustworthiness of the buyer 5= To buyer that also buys from neighbour 2= Price offered (highest bidder) 6=Recommendation from farmer organization 3= First come first served 7= Other (Specify ) 4= Friends and relatives preferred

2.8.6 Does (any member of) this farm keep records of production, use of inputs, sales, or profit & loss accounts? hli57|

0=No Go to question 1 =Yes

2.8.7 VCTiat type of production record keeping system do you currendy use? 1= Written 2 = Computerized hh58j ~ 3 = Other (specify

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2.8.8 We would now like to understand the management practices you follow in jour milk production and how you market them.

For milk, did ... engage in the following activities (October 2007- Does ... September 2008) Has the How keep

quality of much did How records of Enter id ...'s milk ... pay much did How much productio numbers Comparing improved for ... incur did ... pay as n, use of (MID) of Feeding now to five or declined. technical as farmer inputs. member in Deep cows years ago, comparing assistance training organization sales, or charge of Artificial spray Use mineral concentrate Transport have ...'s now with the past costs the membership profit and milk sales insemina (external supplement during milk to the milk yields five years year past year fee the past loss

tion? parasites)? s? milking? market? improved or ago? (ZMK)? (ZMK)? year (ZMK) accounts? Refer to not? (MID) in 0= No 0= No 0= No 0= No 0= No Codes Enter '0' Enter *0' Enter '0' if 0=No Table .2.1 1= Yes 1= Yes 1= Yes 1= Yes 1= Yes Codes below below if none if none none l=Yes

MID MPOl MP02 MP03 MP04 MP05 MP06 MP07 MP08 MP09 MPIO MPll 1 2 3 4 5

Yield and quality codes (MP06; MP07) 1 = improved a lot? 2= improved a little? 3= same as before? 4= worsened?

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2.8.9 I would like to know which milk marketing channelsjou consider betterJoryou and why.

Do the following characteristics matter in choosing a milk marketing channel?

Pays higher price

More secure & continued access to market

Larger quantity of milk sold

Pays for more for higher quality

Provides Technical Assistance

Provides Credit

Easier to seU to (Close, familiar)

Serious Busines s buyer

Respect to payment agreement (less risk)

Faster payment

Marketmg channel 0= No 1= Yes

0= No 1= Yes

0= No 1= Yes

0= No \ - Yes

0=: No 1= Yes

0= No 1= Yes

0= No 1= Yes

0= No 1= Yes

0=No 1= Yes

0= No 1= Yes

Channel MCOl MC02 MC03 MC04 MC05 MC06 MC07 MC08 MC09 MClO 1= Marketers &

other retailers 2= Wholesalers

3= Consumers directly

4= Restaurants

5= Big hotels

6=Supermarkets/ Processors

7=Milk coDection centre

8= Other (Specify)

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2.8.10 Fill in thefollomng table about thefarm's ownership of livestock assets.

Type of Livestock

Does the farm have ...? 0=No^ Go to next asset l=Yes

How many

does the farm own?

Approximately what is the current value ofaUof...? (ZMK)

How may did the household have in September 2003? Entet Vif ttoae

How many did the household consumed?

How many were sold?

What is the value of sells ?

How many were given away (e.g. gifts)

How many died due to disease?

How many were purchased?

Type of Livestock

Does the farm have ...? 0=No^ Go to next asset l=Yes

How many

does the farm own?

Approximately what is the current value ofaUof...? (ZMK)

How may did the household have in September 2003? Entet Vif ttoae

How many did the household consumed?

How many were sold?

How many were given away (e.g. gifts)

How many died due to disease?

How many were purchased?

Asset Name BSOl BS02 BS03 BS04 BS05 BS06 BS07 BS08 BS09 BSIO Cattle

1 Oxen 2 Cows 3 Calves 4 Steers 5 Heifers 6 Bulls

Poultfy 7 Broilers 8 Layers 9 V.Chicken

10 G . fowl 11 Ducks

Other Livestock 12 Pigs 13 Goats 14 Donkey 15 Sheep

37

3. Demographics 3.1 I now would like to ask you a few questions about each of the members of your household/farm family. I will also ask about the farm manager if there is

one. Can you please give me the names of the members of the household? Start with the farm owner/head. What is ...'s

sex?

0=Female l=Male

When was ... bom?

What is ...'s marital status?

1= Single or under-age 2=Married 3=Divorced or separated 4=Widowed

What is the highest level of

attained by

See code below

What is ...'s

Did ... provide farm labour the past 12 months?

0=No l=Yes

Did ... earn any income during the past 12 months (farm or off-farm)?

0=No l=Yes

Did ... have his/her own dairy animal(s) last year (Oct 2007 - Sept 2008)?

0=No l=Yes

Mem ber code

Member name

What is ...'s sex?

0=Female l=Male

Month Codes below

Year (e.g. 1967)

What is ...'s marital status?

1= Single or under-age 2=Married 3=Divorced or separated 4=Widowed

What is the highest level of

attained by

See code below

to the head?

See code below

Did ... provide farm labour the past 12 months?

0=No l=Yes

Did ... earn any income during the past 12 months (farm or off-farm)?

0=No l=Yes

Did ... have his/her own dairy animal(s) last year (Oct 2007 - Sept 2008)?

0=No l=Yes

MID Name DM01 DM02 DM03 DM04 DM05 DM06 DM07 DM08 DM09

1

2 3 4 5 6 •7 8 9 10

Month codes (DM02) l=Jan 2= Feb 3=Mar 4=April 5=May 6=June

7=July 8=August 9=September 10=October 11 = November 12=December

Level of education codes (DMOS): 0=None 5=Std 4; Grade 5 l=SubA; Gradel l=SubB; Grade 1 2=Std 1; Grade 2 3=Std2;Grade3 4=Std3;Grade4

6=Std 5; Grade 6 7=Std6;Grade7 8=Fotml;Grade8 9=Form2;Grade9 10=Form 3; Grade

ll=Form 4; Grade! 1 12=Form5;Gradel2 13=Fomi 6 14=(;ollege Student 15=Tertiary Certificate 16= Bachelors degree

Relationship to head codes (DM06): l=Head 2=Spouse 3=Own child 4=Step child 5= Parent 6= Brother/Sister

7= Nephew/Niece 8= Son/daughter-in-law 9= Grandchild 10=Other (Specify) ll=Unrelated 55=Farm manager

"I thankyou for sharingyonr experiences with me takingyour time! I"

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