Marketing strategy choice and the associated income differentials among smallholder dairy farmers in Ethiopia

Abstract

This study investigates factors that influence the choice of marketing strategies among dairy farmers in Ethiopia. The farmers used three marketing strategies, namely, milk products marketing (26 per cent), raw milk marketing (59 per cent), and both milk products marketing and raw milk marketing (15 per cent). The results showed that the following factors influenced the probability of choosing a raw milk marketing strategy over milk products marketing: age of the household head, proportion of crossbreed cows owned, total milk produced, distance to the market, income per litre of milk, and cooperative membership. Further analysis revealed that dairy farmers are better off if they utilize the raw milk marketing strategy, which has higher returns. Farmers who relied only on milk products marketing had significantly lower dairy income. It is recommended that tailored efforts are channelled towards improving access to raw milk markets by establishing more milk collection points.