CONSUMER WILLINGNESS TO PAY FOR DAIRY GOAT MILK IN SIAYA COUNTY, KENYA

ABSTRACT 
The demand for animal products is projected to increase progressively due to extensive urbanization, rapid growth of human population and income dynamics. Despite the potential expansion of beef and dairy production, dairy goat production as an option for enhancing food security and income generation in Kenya is likely to benefit from this prospect. Essentially, goat milk is nutritionally superior to the cow milk. Although the importance of goat milk is empirically known, its valuation from the potential consumers’ point of view, together with the associated price performance, is not well known. The purpose of the current study was to assess consumption and willingness to pay for dairy goat milk. Multistage sampling was used to obtain 131 consumers at households. Primary data was collected using a structured interview schedule. Data collected was on household consumer characteristics, responses to different bid levels for goat milk and socio-economic factors. The study used double-bounded dichotomous choice CVM to assess consumers’ mean WTP for goat milk and logit model to determine socio-economic factors influencing consumers’ WTP. Results indicated that consumers were willing to pay an average premium of 38% above the current prevailing price of cow milk. Age, number of years in schooling and number of children (18 years of age and below) present in a household had a positive and significant effect on WTP. Awareness, gender and the number of adults aged between 19 and 59 years present in a household negatively influenced WTP. The study recommends policy intervention aimed at facilitating development of marketing infrastructure, creation of awareness of important nutritional and health benefits of goat milk, and boosting the development of goat milk dairy processing plants and systems that can add value to goat milk, so as to capture existing market opportunities. This would enhance food security and income generation of the small-scale resource-constrained farmers.

CHAPTER ONE 
INTRODUCTION 
Background information 
The demand for animal products in the world is projected to expand by the year 2020 due to increase in urbanization, human population and income growth, which will create markets for animal products (Delgado et al., 1999). Dairy goat production as an emerging sub-sector in Kenya is likely to benefit from this prospect. However, commercialization of animal products will be determined by consumption behaviour of consumers. Tastes and preferences of consumers, among other socio-economic factors that influence the consumers’ WTP, will determine the development of the livestock sector (Juma et al., 2010), and the goat sub-sector in particular. 

In Kenya, the livestock sub-sector accounts for about 12% of the total GDP and 40% of the agricultural GDP, and employs 50% of agricultural labour force. The share of livestock related exports comprise 13% of the total export revenue of the country (MoLD, 2008-2012). The livestock population is approximately 60 million head, comprising indigenous, exotic breeds and crossbreds. The major livestock species consist of 9 million Zebu and 3.5 million exotic and grade cattle, 8 million sheep, 11 million goats, 850,000 camels, 330,000 pigs, over 29 million chicken and 470,000 rabbits (MoLD, 2008-2012). Goats, therefore, form an integral component of the livestock sector and play an important role in the economic and social life of many Kenyans, contributing meat, milk and skins (MoLFD, 2007). 

Dairy goats have been introduced in most parts of Kenya through the efforts of various development and non-governmental organizations, among them the Heifer Project International- Kenya (HPIK), which implemented a community-based dairy goat project to improve the nutrition security and incomes of small-scale resource-poor farmers (Ogola et al., 2009). The drastic increase in human population pressure, land scarcity and diminishing production resources (Bett et al., 2009) have also stimulated the use of dairy goats in rural development efforts (Josserand, 1984). Generally, dairy goat production is becoming an important economic activity for the target farmers because they can easily adapt to the environment compared to cattle, require a small piece of land, multiply quickly and can feed on a variety of plants (FAO, 2005). 

The total annual milk produced in Kenya is about 5.31 million litres of which approximately 83% is produced by cattle and the rest by goats and camels (MoLD, 2008-2012). The HPIK and other development organizations have helped farmers to increase goat milk production through the use of high value exotic genotypes (breeds) like the Saanen, British Alphine, Anglo-Nubian and the Toggenburg (Ogola et al., 2009). Although dairy goats have been introduced in various parts of the country by development organizations, the enterprise still remains at the subsistence level (Ogola et al., 2010) and, therefore, not sustainable in the end (FARM-Africa, 2005). This has been majorly attributed to lack of well designed and executed breeding programmes, low commercialization of dairy goat milk and milk products, poor housing and lack of extension services, amongst other factors (Kosgey et al., 2006). 

Dairy goat farming is emerging as an important economic activity in some parts of Siaya County, where land fragmentation has resulted in small pieces of land that cannot support dairy cattle farming. The landholdings are 0.5-2 hectares, on which maize, beans, cassava, sweet potatoes and other crops are concurrently grown. Smallholder farmers in this County, therefore, have few options to increase their incomes and improve their livelihood. Dairy goat farming, introduced by the HPIK, can be an option to small-scale resource-poor farmers in this area because it is more sustainable on small pieces of land. 

Essentially, goats’ milk is more nutritive and has medicinal value over that of the cow; it has smaller fat globules size which is more digestible compared to cow milk. Goat milk proteins are also believed to be more digestible and their amino acids are absorbed more efficiently, than those of cow milk (Haenlein, 2004). It has particular benefits in the diet of children and adults who show sensitivity or allergic reactions to cow’s milk (Park, 1994). It has also been found to be beneficial to HIV/AIDS victims. However, strong flavour of goat’s milk, and issues connected with witchcraft and lower social status are said to prevent people from consuming goat and sheep milk (Manyenga, 1987). The situation is currently changing due to urbanization, change in dietary habits and awareness of the nutritional value of goat milk (Kosgey, 2004). However, the question arising was, how much a consumer would be willing to pay for goat milk? This is important as the ability of goat’s milk to fetch premium price may have a strong impact on the profitability of this emerging sub-sector and, consequently, its commercialization. 

Statement of the problem 
Scarcity of land due to increased human population in Kenya is becoming a serious impediment to agricultural production, necessitating change in land use systems to accommodate the food demands from the diminishing land parcels. This has stimulated the use of dairy goats in rural development efforts to play a role in food security and income generation. Although dairy goats have been introduced in various parts of the country by development organizations, the enterprise still remains at the subsistence level and has not been commercialized in most of the trial areas. Land scarcity, poverty and rapid spread of HIV/AIDs are major challenges in Siaya County. HIPK implemented a community-based dairy goat project to improve on nutrition and health security and incomes of the vulnerable small-scale farmers. Despite all these there is still low preference of goat milk and, thus low commercialization and, consequently, dilemma of how much consumers would be willing to pay for the new product in the name of goat milk which is being promoted in the area. This is important as the ability of goat milk to fetch premium price may have a strong impact on the profitability of this emerging sub-sector. 

Objectives of the study 
The overall objective of the study was to assess consumption and willingness to pay for dairy goat milk with a view to initiating appropriate interventions, including informing dairy goat development initiatives and policies. To achieve this, and with reference to Siaya County, the specific objectives were: 

(i) To characterize the households’ willing and not willing to pay for goat milk. 
(ii) To assess how much consumers were willing to pay for goat milk. 
(iii) To determine social-economic factors influencing consumers’ willingness to pay for goat milk. 

Research questions 
To achieve the objectives of the study the following research questions were asked: 
(i) What were the characteristics of households willing and not willing to pay for goat milk? 
(ii) How much were household consumers willing to pay for goat milk? 
(iii) What socio-economic factors influence consumers’ willingness to pay for goat milk? 

Justification 
Goat milk has a far greater quality compared to cow milk therefore, this study attempted to assess how much consumers were willing to pay for goat milk compared to cow milk. The ability of goat milk to fetch a premium price have strong impact on the profitability of this emerging sub- sector and, consequently. its commercialization. The focus of most studies on dairy goat industry has been on production side but has given inadequate attention to demand side. The introduction of new production and processing technologies in the dairy goat sub-sector requires sufficient information to ease planning and implementation. Besides to potential price performance, stakeholders need to know the likely impact of socio-economic and cultural factors on demand because the success of the new technologies depends on whether there is a market for their products. The current study focused on consumer WTP for goat milk, demand side in dairy goat industry and socio-economic factors that could influence WTP. The study was intended to provide information to emerging farmers on domestic demand for goat milk products; provide producers and retailers in the goat milk supply chain and policy makers with relevant information that is expected to contribute to the increased production from and commercialization of this emerging dairy goat industry. Consumer awareness was improved during data collection period of the study in view of the fact that, medicinal and nutritional benefits of goat milk were outlined during the exercise. With these, consumers may have better understanding of goat milk. 

Scope and limitations 
The study was conducted on goat milk potential consumers at households. The study focused on demand for goat milk and drew an emphasis on consumers’ WTP for goat milk and the analysis of factors influencing WTP for the milk. The factors that were used for the analysis were limited to some of the socio-economic factors and the level of awareness regarding the benefits of goat milk. Siaya County was purposively selected for the study owing to its comparative advantage for the HIPK dairy goat project. The study did not capture the production of as well as the quantity of goat milk available in the study area. 

Operational definition of terms 
Contingent valuation: - refers to a “stated preference” method because it asks people to directly state their values or the amount they are willing to pay. ( U S D A – NRCSNOAA, 2000). 

Household: - is an independent male or female and his/ her dependants who must have lived together for a period not less than six months. The members are answerable to one person as the head and share the same eating arrangement. 

Potential consumer: - is an individual or a household unit that is willing to consume goat milk. 

Price premium: - is the additional percentage charged for products with more beneficial attributes like goat milk compared to other products like cow milk. 

Willingness to pay: - is the desire to give a certain amount of money to acquire a certain product, in this case, the goat milk and milk products.

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Item Type: Kenyan Project Material  |  Attribute: 50 pages  |  Chapters: 1-5
Format: MS Word  |  Price: KSh900  |  Delivery: Within 30Mins.
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