The purpose of this section was to fill the gaps in the literature by comprehensive assessment of commercialization level and its determinants at the smallholder dairy household level. Improvement in commercialization would result to improved revenue to smallholder dairy farmers hence improvement in their welfare (1) (6). Analysis of commercialization level indicates that Smallholder commercialization is at 49.8 percent in Nakuru and 66.1 percent in Nyandarua. This indicates a moderately market participation in the study area. Smallholder dairy commercialization level as reveled by the study is affected by demographic and socioeconomic factors which are varied depending on the individual farmers as well as the geographical endowments as explained subsequently.
The study shows that the proportion of male-headed households (83.6 percent) is significantly higher than that of female-headed households (16.4 percent). Gender of household head captures the differences in market orientation between males and females with males expected to have a higher predisposition to participate in markets than females. Majority of the household heads can, read and write having 87.8 percent having secondary education (13). The study agrees with the finding of (3) positively influence commercialization process. The mean age of the household head is 56 for Nakuru and 48 for Nyandarua. The age of the household head is a proxy measure of experience and availability of resources. It is possible that older and more experienced heads are able to take better production decisions and have greater contacts which allow trading opportunities to be discovered at lower cost than younger ones (13). The study finds that gender of the head affects the level of commercialization. Household headed by male exhibited negative and significant (p < 0.10) effect on commercialization. This observation is attributed to the fact that of the male household head do not engage directly in the physical engagement of dairy activities. They tend to delegate the marketing responsibilities to other household members. The observed results are in harmony with (3) (8). The results however it contradicts the study by (17) whose finding was that gender of the household head neither significantly influences the decision to participate nor the extent of participation in smallholder dairy marketing
The mean household size was statistically different with 6 and 5 persons in Nakuru and Nyandarua respectively. This is indicative of the amount of labour available for dairy activities. This observation significantly (p < 0.10) negatively affect commercialization. This means that as the number of persons in the household increases, the probability of farmers’ orientation towards commercialization in the study area reduces. It is argued that large household sizes detracts households from market orientation due to its effect on increasing household domestic consumption needs. Given that these farmers are already subsistence in nature due to their small holding, this result is expected. This result is in line with Enete and Igbokwe (2009) and Gebremedhin and Jaleta (2010). Variable for casual employees manifested a positive effect, at a significance level of (p ; 0.10) for Nyandarua. However generally and for Nakuru the effect was insignificant though positive. The positive sign of the coefficient means that if a smallholder dairy farmer engages more active labour, its probability to taking decision of participating in the output market increases due to an increase in output. This result is consistent with Gebremedhin and Jaleta (2010b). Therefore, this seems reasonable since households with a large number of active household labors can reduce their cost of production and produce surplus to be market-oriented. (18)
The current study analyzed the effect of land size with regard to smallholder dairy commercialization. The effect of land size was positively significant in Nyandarua (p ; 0.10) though was insignificant in Nakuru and in general effect. The findings confirm to the study by (8). The mean land holding size accessible per household is 3.5 Ha in the study area. The mean land holding size is a good indicator of the dominance of smallholder farmers in the region and the country at large. Land holding size is one of the major determinant factors for agricultural harvest and commercialization (5), Okezie et al. (2012), Goshu et al. (2012). This means that as the farm size increases, the probability of commercialization increases. Studies by Martey et al (2012) and (12) also had opined that farm size influences the level of agricultural commercialization through the potential to produce surplus for the market. These results confirms to the study by (17) that the inability to produce marketable surplus by the majority is due to smaller land sizes.
Distance to the nearest road generally reduced the level of commercialization insignificantly. However it reduced commercialization significantly p ; 0.05 for Nakuru. This could be due to the higher transaction cost for marketing (8). Distance to tarmac road, which is an indicator of travel time and cost to the market, is significantly and positively associated with the decision to participate in markets and negatively and significantly associated with the decision to participate in milk markets (17)
The study also considered Farm assets value and the number of dairy animals kept in regard to commercialization. Farm assets value is important variable having significantly positive effect on the decision of smallholder farmers to participate in the output market. It is statistically significant at p ; 0.10 generally and p ; 0.01 for Nakuru though positively insignificantly influencing Nyandarua. This indicates that households with more assets value tend to participate in the output market. This means that farms with more assets tends to engage more on production and marketing as the assets tend to improve farm efficiency. The number of pure breed dairy animals kept as expected affected commercialization positively and significantly (p ; 0.01) across the study area. This is explained by the fact that as a farmer increases the number of pure breed dairy cows, then there in a very high chance of getting more milk and hence commercialization.
Years of dairy farming was positively insignificant in affecting commercialization. The result implies that as the number of years of the farmers’ increases, the probability of commercialization also increases. Years of farming as a proxy for experience has been known to lead to perfection in dairy and commercialization activities. This result is consistent with (18) Agwu (2009) and (Agwu and Ibeabuchi, 2011).
Farmer’s group membership and number of group members was also studied. The results revealed that membership to associations positively insignificantly affected commercialization. This could be explained that membership of associations and groups possess the potentials of increased access to information important to production and marketing decisions Olwande, (2010) (12). Given this, the result is plausible as expected. On the contrary, the number of members in a group negatively insignificantly affected commercialization. As group members increase in number the effectiveness of the group reduces in achieving the desired objectives. The findings contradicts the prior studies of (17).
Distance to extension service provider showed mixed results. It showed negative insignificant result for the general study area. For Nakuru the results show significantly negative relationship. Being that resources including time are required to access the extension services, many farmers tend to be discouraged to seek their professional help in improving dairy output. The results conform to studies by (28) (29)