Factors Affecting Milk Market Supply and Level of Supply by Smallholder Milk Producers: The Case of Dessie Zuria District, South Wollo Zone, Ethiopia

Abstract

The study was conducted in Dessie Zuria District of South Wollo Zone, Northern Ethiopia with the specific objectives of analyzing determinants of milk market supply. A two stage sampling procedure was applied to select sample milk producer households of the study area. In the first stage, 12 potential milk producer kebeles were purposively selected out of 37 administrative kebeles of the district based on their level of milk production. Then, a total of 6 sample kebeles were selected randomly. In the second stage, 100 sample smallholder milk producers were selected from those 6 randomly selected kebeles and both qualitative and quantitative types of data were collected. Secondary data were collected from journals, reports and documents used in the study area. Primary data were collected from individual smallholder milk producers, key informants and focus group discussions using both structured and semi-structured types of questionnaires. Data analysis was performed both by descriptive and econometric analysis employing STATA version 12 software. Factors determining participation of milk market supply was analyzed using Heckman two stage estimation model and the results of first stage/probit regression model showed that both decision of participation and level of participation of households in milk market supply were affected significantly by age of the household, educational level, number of milking cows owned, distance from market/urban centres and technical training. Decision of participation of households in milk market supply was also affected significantly by access to credit whereas level of participation was affected significantly by sex of the household, family size and access to market information. Thus, it is suggested that strengthening of participation of smallholder milk producers in milk market supply via capacity improvement and enhanced access of appropriate technical support service provision.
Keywords: Heckman two stage model, Milk, Market supply