Poster prepared by Vera Vernooij for a Farmers’ Workshop, Nandi and Bomet counties, Kenya, 5–10 February 2018

1. 1. What is a value chain?
A value chain is the range of activities
required to deliver a final product (like milk
or yoghurt) to the consumer. Often, the basic
product (like milk) is processed, and made
into a product that has more value. This
happens for example when long life milk is
made out of raw milk.
Below is an illustration of what a simple
value chain looks like:
Vera Vernooij – v.vernooij@cgiar.org
International Livestock Research Institute
P.O. Box 30709-00100 Nairobi
This project was funded by International Fund for
Agricultural Development
The Kenyan dairy value chain
A dairy value chain analysis was carried out in Nandi and Bomet counties in Kenya from May-
July 2016.
Summary of key findings:
• The value chain is uniquely ‘embedded’ within the counties, leading to differences as to
where people sell their milk.
• Surprisingly, the milk price is not main factor determining where farmers like to sell their
milk, but a beneficial payment structure is. For example, selling to neighbours generally
offers ‘quick cash’.
• The relatively better off farmers are more likely to sell their milk to the formal market
(processors and farmers’ organizations).
Pictures
2. Study sites
The study was conducted among 240
farmers. The specific site locations are in the
table below:
3. Categories of farmers
• Farmers were classified by; gender of the
household head, income category,
number of cows, distance to a milk cooler
(km), owned land (acres), grazing
practices and available household labour
to get four different categories.
• The group that is better off based on the
above factors, is more likely to sell milk to
the formal market i.e. to farmer
organizations and/or processors like New
Kenya Co-operative Creameries and
Brookside Dairy Limited.
• The factors that most strongly influence
whether a farmer sells milk to the formal
or informal market are the number of
cows and the distance to a milk cooler.
This document is licensed for use under the Creative
Commons Attribution 4.0 International Licence.
4. Selling milk
The study looked at four channels for
selling milk and farmer preferences:
farmer organizations, processors,
individual customers, and middlemen.
Surprisingly, milk price ranks second
among factors determining where
farmers like to sell their milk; a
beneficial payment structure is is the
main factor.
Below: red dots indicate households
that sell to individual customers.
People living in the tea estates are the
main market in the north of Bomet.
Farmers’ workshop: 5th-10th February,
2018
Nandi and Bomet counties
Based on Kaplinsky and Morris (2001) A Handbook for
Value Chain Research.
Thesis research as part of a MSc. degree in environmental sciences at Utrecht University, the Netherlands, obtained in November 2016, as an
intern at the Center for International Forestry Research (CIFOR), Kenya. Fieldwork conducted from May to July 2016.
Vera Vernooij
International Livestock Research Institute
Production
Milk is produced by dairy
farmers
Marketing
Milk is sold in various forms
such as fermented milk
(‘maziwa mala’)
Consumption
Milk and other dairy products,
such as yoghurt, is consumed
Left: Red
dots indicate
households
that sell to
farmer
organizations
. Strong
presence of
the formal
market in the
north of
Nandi
County.