Determinants of Milk Commercialization through Milk Collection Centres of the Smallholder Dairy Value Chain in Zimbabwe

Abstract

The dairy development programme schemes in Zimbabwe form the basis for the participation of smallholder dairy milk producers in the dairy value chains. Smallholder producers participate in the semi-formal value chain (in which milk is processed at the milk collection centres and sold locally) and formal dairy value chains (in which milk delivered to milk collection centres by smallholder producers is delivered to established formal milk processors). Although the dairy development programme was formed in the early 1980s, the smallholder value chains have failed to make significant impact, with only 5% of the milk coming from the value chains. The objective of this study was to determine the main reasons for the low commercialized milk entering the smallholder dairy value chains through the milk collection centres. A sample of 185 dairy producers from four smallholder dairy schemes were randomly selected. A Tobit regression model was used to assess the main determinants of commercialization. The results indicate that access to information, distance to the MCC from the farmers’ homestead and producer price of milk paid by the MCC were the major determinants of the commercialization of the milk sold to the MCC. The main conclusions of the study are that in order to improve the role of the MCC in milk marketing, policy interventions have to be targeted and prioritized at improving market access. The MCCs play a central role in integrating smallholder farmers to value chains and markets that have potential to incentivize farmers to increase the quantities marketed through the MCCs, if favourable market and price policies are developed and implemented. Establishing sub-centre MCC within easy reach of farmers would enhance smallholder farmers’ participation and commercialization of the milk output from the smallholder dairy value chain.

Keywords: dairy development programme, market, price, processors, Zimbabwe

DOI: 10.7176/JESD/13-10-05

Publication date:May 31^st 2022