Journal of Agricultural Economics and Development Vol. 3(1), pp. 012-016, February 2014 ISSN 2327-3151 ©2014 Academe Research Journals

Full Length Research Paper

The influence of livestock market structure conduct and performance on herd productivity among smallholder dairy farmers in Western Kenya

Jonah N. Muthui¹*, Patience M. Mshenga¹ and Bockline O. Bebe²

¹Department of Agricultural Economics and Agribusiness Management, Egerton University, P.O. Box 536, Njoro, Kenya.

²Department of Animal Sciences, Egerton University, P.O. Box 536, Njoro, Kenya.

*Corresponding author. E-mail: muthuijonah@yahoo.com.

Accepted 17 February, 2014

Abstract

Dairy farming in Kenya contributes about 4% of the country’s GDP. The dairy sector contributes significantly to poverty alleviation by creating employment in rural Kenya. Increased activity in farming is driven mainly by the high demand for milk against insufficient supply. To gain from expanding market opportunities, smallholders in Western Kenya often purchase replacement cull cows or heifers from livestock markets which mainly obtain stock from neighbouring milk surplus Rift Valley. Market features such as lack of accurate information, high transaction costs and price inefficiency have likely led to low productivity of these dairy herds thus denying smallholders income. This paper provides an insight into the influence of livestock market features on herd replacement decisions and the resulting productivity. The study showed that dairy cows purchased in local livestock markets did not improve dairy productivity in Western Kenya. Lack of accurate information in the markets related negatively to productivity, while high transaction costs and price of cattle reflected insufficient supply of high potential dairy cows. The study recommends technical and institutional changes to improve dairy cow breeding strategies and marketing structure. Creating access to affordable credit to smallholder dairy farmers will improve their market participation and give them some market command.

Key words: Livestock markets, herd replacement, smallholder dairy farmers.