Determinants Influencing Market Outlet Choices Among Smallholder Dairy Farmers in a Developing Economy

Dairy farming is an important livelihood source for most smallholder farmers in Kenya. However, most smallholder dairy farmers in Kenya face various challenges in selecting profitable market outlets, and their choices are influenced by various factors. Understanding these determinants is crucial, as market outlet decisions directly impact farmers’ income, livelihoods, and the overall growth of their agrienterprises. However, there is limited empirical evidence on the determinants influencing market outlet choices among smallholder farmers in Kenya specifically Narok County which is an emerging dairy hub in the country. In this context, this study analyses the determinants influencing market outlet choices (Farm gate, Milk bars, Traders, Cooperatives, and Processors among smallholder dairy farmers in Narok County, Kenya using a multivariate probit model. Data was collected using a multi-stage sampling procedure from the 384 smallholder dairy farmers. Some of the key factors that shape smallholder dairy farmers’ milk market choices, based on the results of the study include household head occupation, farm size, production cycles, milk volumes, market distance, and group membership. Policy interventions should aim to strengthen cooperative structures, support group memberships, invest in transport infrastructure to mitigate distance barriers, encourage prompt payment systems, and enhance market information access to support sustainable participation of smallholder dairy farmers in diverse market channels.