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Socio-Economic Analysis Of Milk Essay

1528 Words7 Pages

SOCIO-ECONOMIC EFFECTS OF MILK COOLING PLANTS AMONG SMALLHOLDER MILK FARMERS IN BOMET COUNTY
Statement of the Problem
Dairy processing and marketing in Kenya was developed with the increased in milk production through the Kenya cooperative creameries, which is the largest dairy cooperative in Kenya. The Cooperatives were the dominant players in the formal milk marketing and dairy farmers had no other option of milk delivery. After post liberalization in the dairy sector in 1992, government and the private investment increased entered into the market. This led to an increase in the number of milk deliver channels in Kenya. Infact about 70 percent of marketable milk were delivered to the market through informal channels (Rajendran & Mohanty, …show more content…

Milk produced at the farms by smallholder farmers on the other hand is collected by middle men for big dairy processing plants situated far away from the villages. The plants process the raw milk, produce premium products and sell the same through retailers or distributors. The main processing plant pays farmers only for the raw milk while retaining all the money it makes on the sale of processed milk and premium milk products. According to Lanchester (2000), milk distribution channels arrangements tend to be long term and hence delivery channel choices are usually classified as strategic rather than tactical or operational. This is because delivery channel choices have a direct effect on the rest of the farmer`s marketing activities and also, once it is established, channel systems may be difficult to change especially in the short run. Although this may be less true for smallholder farmers, delivery channel decisions are still among the most critical decisions facing any organization or small-scale farmer and the chosen channels therefore affect all other marketing decisions (Berry,

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