The impact of policy liberalization on smallholder peri-urban dairy producers at Nyeri, Kenya

Abstract

Kenya has been self-sufficient in dairy products until recently. Early in 1992, however, shortages of dairy products began to occur, particularly in the fresh milk market. Price decontrol of dairy products, among other policy changes, was implemented in May 1992 to improve producer prices and stimulate increases in supply. This paper examines the impact of these dairy policy changes, in the context of the market environment, on smallholder peri-urban producers. A case study of Nyeri per-urban producers is examined in order to assess the impact of policy and market environment at the farm level. The policy Analysis Matrix methodology developed by Monke and Pearson is applied to determine the effects of price policy and market failure on producer revenues and costs.