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Uncertainty in milk production by smallholders in Tanzania and its implications for investment

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  • Twine, Edgar E.
  • Omore, Amos
  • Githinji, Julius

Abstract

The study evaluates the impact of risk on enterprises of male, female and young farmers operating in the formal and informal smallholder dairy value chains in Tanzania. It also examines the effect of uncertainty on the decision to invest in milk production in the two value chains. Results indicate that youths in the informal dairy value chain face the greatest level of risk followed by men in the formal value chain, and then men in the informal value chain. Women in both value chains and youths in the formal value chain face relatively low risk. Overall, milk production in the informal value chain is found to be substantially riskier than production in the formal chain. Optimal investment triggers are found to be much larger than the conventional triggers and are sensitive to volatility of returns. The results’ managerial and policy implications for inclusive dairy industry development in Tanzania are highlighted.

Suggested Citation

  • Twine, Edgar E. & Omore, Amos & Githinji, Julius, 2018. "Uncertainty in milk production by smallholders in Tanzania and its implications for investment," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 21(1).
    • Handle: RePEc:ags:ifaamr:266449
    DOI: 10.22004/ag.econ.266449
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    Cited by:

    1. Dismas Said Shija & Okeyo A. Mwai & Julie M. K. Ojango & Daniel M. Komwihangilo & Bockline Omedo Bebe, 2022. "Assessing Lactation Curve Characteristics of Dairy Cows Managed under Contrasting Husbandry Practices and Stressful Environments in Tanzania," World, MDPI, vol. 3(4), pages 1-21, December.
    2. Edgar E. Twine & Elizaphan J. O. Rao & Isabelle Baltenweck & Amos O. Omore, 2019. "Are Technology Adoption and Collective Action Important in Accessing Credit? Evidence from Milk Producers in Tanzania," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 31(3), pages 388-412, July.

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