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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Smallholder Dairying under Transactions Costs in East Africa
Authors:Staal, StevenISNI
Delgado, ChristopherISNI
Nicholson, Charles
Year:1997
Periodical:World Development
Volume:25
Issue:5
Period:May
Pages:779-794
Language:English
Geographic terms:Ethiopia
Kenya
Subjects:pastoralists
marketing
dairy industry
small farms
Agriculture, Natural Resources and the Environment
Development and Technology
Economics and Trade
External link:https://doi.org/10.1016/S0305-750X(96)00138-6
Abstract:This paper investigates a key issue of public policy for African countries, which are searching for ways to promote the inclusion of large numbers of smallholder farmers in the benefits offered by structural adjustment policies. The paper first argues that in periurban areas of Africa where cattle already are kept, dairy offers high potential as a smallholder diversification activity. Second, the paper hypothesizes that growth in smallholder dairying is limited by especially high transactions costs for both production and marketing of dairy products by smallholder farmers in Africa. In African economies that are only partly commercialized, smallholder farmers are likely to face higher transactions costs than larger producers. Third, the paper hypothesizes that differential levels of transactions costs across producers in what appears on the surface to be a single 'market' explains why producers habitually accept widely different prices for a seemingly homogenous good in the same location and time period. Fourth, the paper argues that producer-level institutions such as cooperatives and contracts with buyers play a central role in reducing transactions costs where market dairy activity is observed. These assertions are investigated in case studies for Kenya (Central Province, 1996) and Ethiopia (Addis Ababa, 1992, 1993). Bibliogr., notes, ref., sum.
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