Impact of adoption of risk management strategies on milk production among smallholder dairy cattle farmers in Meru County, Kenya.

Abstract

A majority of smallholder dairy cattle farmers make their income primarily from milk production. The dairy sector contributes 14% of Kenya's agricultural GDP. The SDC farmers face a number of risks throughout the process of milk production. These include environmental, economic, and social factors; that are caused by production, marketing, and finance activity. The ramifications of the risks have not been addressed, and risk mitigation strategies have not been applied correctly. The study was conducted to determine the impact of adoption of risk management strategies in milk production among smallholder dairy cow farmers in Imenti South Sub County, Meru County, Kenya. Propensity score matching regression model was used to investigate the impact of risk management strategies adoption on milk output. The results showed that adoption of vaccination, insurance and milk preservation were statistically significant in improving milk production. However, off-farm investment and diversification were statistically insignificant in improving milk production. This was due to the fact that there would be divided attention and less time allocation on milk production if the farmer adopted off-farm investment. Limited land size factor affected the adopted diversification since the farmer will allocated more land to one enterprise example crop production hence limiting the other which is dairy cattle production. The results will provide baseline data for prospective risk analysis studies on smallholder dairy farming enterprise. Findings of this study will enable the dairy cattle farmers to understand the impact risk has on their production and the benefit of adopting risk management strategies in order to increase productivity.