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Farmers’ preference for bundled input-output markets and implications for adapted dairy hubs in Tanzania – a choice experiment

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  • Rao, E.J.O.
  • Mtimet, N.
  • Twine, E.
  • Baltenweck, I.
  • Omore, A.

Abstract

Dairy business hubs present opportunities for efficiently linking farmers to input and output markets. Yet participation by smallholder dairy farmers in these hubs will only be realized if the hub options are adapted to fit the needs of farmers. In this study we have analyzed preference for dairy business hubs in Tanzania where ILRI is currently implementing adapted hub options. Using survey data from smallholder dairy producers from Tanga and Morogoro and applying the choice experiment method we find significant preference for hub options with higher milk prices and payment for milk on a fortnight rather than cash basis. Farmers also prefer hub options that bundle milk marketing with input provision. For bundled inputs, smallholder dairy farmers prefer hub options that allow payment for such inputs via credit or check-off rather than cash. Our analyses also reveal significant heterogeneity in preference among farmers hence the need for advanced analytical approaches that can handle such heterogeneity. Emerging dairy hubs in Tanzania should be supported to either establish in-house input provision arrangements or to enter into contracts with major agro-input dealers in their environs.

Suggested Citation

  • Rao, E.J.O. & Mtimet, N. & Twine, E. & Baltenweck, I. & Omore, A., 2016. "Farmers’ preference for bundled input-output markets and implications for adapted dairy hubs in Tanzania – a choice experiment," 2016 Fifth International Conference, September 23-26, 2016, Addis Ababa, Ethiopia 246961, African Association of Agricultural Economists (AAAE).
    • Handle: RePEc:ags:aaae16:246961
    DOI: 10.22004/ag.econ.246961
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    References listed on IDEAS

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    1. Elisabeth Fischer & Matin Qaim, 2010. "Linking Smallholders to Markets: Determinants and Impacts of Farmer Collective Action in Kenya," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 48, Courant Research Centre PEG.
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    4. Helen Markelova & Esther Mwangi, 2010. "Collective Action for Smallholder Market Access: Evidence and Implications for Africa," Review of Policy Research, Policy Studies Organization, vol. 27(5), pages 621-640, September.
    5. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74(2), pages 132-132.
    6. Mujawamariya, Gaudiose & D’Haese, Marijke & Speelman, Stijn, 2013. "Exploring double side-selling in cooperatives, case study of four coffee cooperatives in Rwanda," Food Policy, Elsevier, vol. 39(C), pages 72-83.
    7. Fischer, Elisabeth & Qaim, Matin, 2012. "Linking Smallholders to Markets: Determinants and Impacts of Farmer Collective Action in Kenya," World Development, Elsevier, vol. 40(6), pages 1255-1268.
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    Cited by:

    1. 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(01).

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