Understanding dairy commercialization : Evolving market linkages, transition, and resilience of dairy farming in the East African highlands

Summary

Abstract

How can dairy farmers in the land-scarce East African highlands increase their market participation in a sustainable way? Answering this question is important to ensure sufficient supply of safe milk and dairy products to rural and urban consumers. The question implies that farmers can make a decent livelihood, achieve investments and changes in their practices, and are not exposed to insurmountable risks. It also implies that other actors in the market chain do the same, and that a conducive enabling environment is present. The question further touches on societal expectations regarding what is being produced and how, with profound concerns about social inclusivity and the impact of market dynamics and climate change.

Chapter 1 lays out the objective of this thesis to gain insights into factors affecting commercialization of dairy farming under land scarcity, through assessment of the dynamics of market participation, land use intensification, and resilience of dairy farming systems in relation to the markets for inputs, services, and outputs. The main research question is: in what ways do market quality and spatial factors affect commercialization of dairy farming systems under land scarcity in two countries in the East African highlands? It considers the research question from different angles: the role of spatial factors in driving or hindering upgrading of dairy farming systems; the effects of input and service arrangements on the market quality and market participation of dairy farmers; and lastly, transition and resilience of farming systems

Chapter 2 looks at the effect of being located in a dairy cluster on dairy farm commercialization. This comparative study of five emerging dairy clusters elaborates how the upgrading of farming systems, value chains, and context shapes transformations from semi-subsistent to market-oriented dairy farming. The main results show unequal cluster upgrading along two intensification dimensions: dairy feeding system and cash cropping. Intensive dairy competes with high-value cash crop options that resource-endowed farmers specialize in, given conducive support service arrangements and context conditions. A large number of drivers and co-dependencies between technical, value chain, and institutional upgrading build up to system jumps. The main theoretical implications are (1) for the debate about cluster upgrading, that co-dependencies between farming system, market, and context factors determine upgrading outcomes; and (2) for the debate about intensification pathways, that service providers need to consider differences in farmer resource endowments, path dependency, concurrency, and upgrading investments.

Chapter 3 explores the effects of proximity to input and output markets on commercialization. Dairy farms in nine villages each in Ethiopia and Kenya were sampled and interviewed along a double proximity gradient, to local and end-markets. Effects on many production and marketing parameters were measured and compared, to test the hypotheses that intensity of dairy farming and degree of market participation increase (1) with proximity to end-markets and (2) with proximity to local service centres. Findings prove the second, but only partly the first one. An implication of this study is that the common typology of dairy farms as ‘(peri-)urban’ and ‘rural’ needs adjustment by outlining local market access and connectivity. ‘Remote’ rural farms need to be connected to milk collection infrastructure, input shops and services to even have the choice to increase market participation.

Chapter 4 presents a case study from Kenya on one particular model of service agri-enterprises, evaluating both technical and business performance. It addresses the gap in understanding performance of emerging private agricultural extension and advisory service (AEAS) models in developing country contexts, in relation to their dual objectives of supporting farmer-clients and becoming profitable agribusinesses themselves. A multiple case study is presented of an emerging youth-led agribusiness model offering silage-making and other services in the Kenyan dairy sector. The results show its contribution to some changes in farmers’ practices, but with limitations to optimal technical performance. Evidence implies that enhancing the contribution of such agri-enterprises to transforming agrifood systems requires sustained support in business incubation, market development, and strengthening of the value proposition to farmer-clients. The dual perspective on performance expands theoretical perspectives for assessing AEAS, especially in relation to commercialization.

Chapter 5 contains a review of how resilience is being assessed in recent literature. It aims to identify the commonalities, differences, and gaps, as well as their implications, in resilience conceptualization and in assessment approaches for farming systems. The lack of agreement on resilience, links to other key concepts, and degree of specification lead to different choices in assessment approaches. This chapter uses a series of characteristics to code and assess 123 papers relating to resilience and its assessment, in order to clarify the apparent ambiguity in theoretical underpinning of resilience assessment approaches. The study proposes to further develop resilience assessment methodology by drawing from the different perspectives, and it identifies five key elements that should be included in such methodology development.

The discussion in Chapter 6 formulates conclusions and implications for theory, policy and practice. The main conclusions are:

Spatial factors are critical drivers of commercialization of dairy farming, with proximity to local markets and being located in a dairy cluster enhancing commercialization.Concurrent and co-dependent upgrading in farming, market, and context domains enhances market quality for dairy and/or other farming activities.Farmers’ market quality and feasibility space are also enhanced by the plurality and performance of input and service provision.Risks and risk perceptions around market quality play important roles in decisions of upgrading; resilience assessment needs to move beyond specific and known risks to include multiple and unknown risks, in order for commercialization to be sustained.Connecting theory around system jumps of farming systems and around resilience determinants offers a way to explain farmer attitudes toward commercialization.

Dairy commercialization will thus need to consider spatial effects; concurrent upgrading in farm, market, and contextual domains; plurality and performance of input and service providers; risks and risk perceptions; and resilience so that commercialization can be sustained over time.