Assessing the determinants of choice of formal milk marketing channels by dairy farmers in Rubindi sub-county, Mbarara district

Abstract

Uganda has emerged as one of the largest milk producers in East Africa and the Ugandan dairy sector has been experiencing growth since 1990s, although the yields have remained quite low compared to the world average the dairy sector has not only survived but also flourished. The sector has however remained largely informal as far as milk marketing is concerned. The liberalization and Cooperatives operation was the major factor development program, which helped to create strong network and linkages among thousands of smallholder milk producers, processors and urban consumers is the major factor behind its flourishing. More emphasis has been put on promotion of formal milk marketing channel choices and the total proportions sold to the formal channels by dairy farmers. The main objective of this study was to assess the extent of formalization of milk marketing channels in Rubindi sub-county in Mbarara district. Specific objectives were to characterize dairy farmers, examine the different formal and informal marketing channels and assess the determinants of choice of formal marketing channels. This study was conducted in Rubindi subcounty, and a sample of 72 dairy farmers was selected using random sampling method to participate in the study. Binary Logit regression model results revealed the most significant determinants of farmers’ choice of formal milk marketing channels were information access, herd size of the dairy farmers, access to credit and sex. The study recommended that female dairy farmers and/or small dairy farmers be better organized into groups to enable them market their milk through the formal marketing channels. Providing dairy farmers with more access to credit services and market information in Rubindi sub-county will also increase their likelihood of participating in formal milk marketing channels.