INSTITUTIONAL ANALYSIS OF MILK MARKETING: THE CASE OF WUKRO KILTEAWLALO DISTRICT, EASTERN ZONE OF TIGRAY, ETHIOPIA

Abstract

Institutional set-up assists and facilitates transaction of products especially like milk that need immediate exchange due to easily spoilage nature. Studies focusing on institutional analysis in dairy marketing have not been done in the study area so far. Thus, this study was conducted in Wukro Kilteawlalo District of Eastern Zone, Tigray. The study aims to analyze the institutional set-up of milk marketing. Both primary and secondary data were used. Primary data were collected from 139 milk producers selected randomly from four kebeles of the district. To analyze the data descriptive statistics and econometric methods were used. In the first stage of double hurdle estimation, age, access to marketing information, number of crossbred cows and milk per day was affected positively whereas land holding was negatively and significantly affected the milk market participation decision. In the second double hurdle estimation milk per day, nonfarm income, extension contact and number of local and crossbred cow affected positively however market distance was affect negatively and significantly the volume of milk marketed. In the probit model, milk produced per day and membership to milk cooperative affected positively where as age, nonfarm income and market distance affected negatively contract use of the dairy producers. The multivariate probit model results indicated that sex of households head, education level, family size, volume of milk sold, distance to nearest market, nonfarm income, access to market information significantly influence milk producers choosing of market outlets. The study has also revealed that due to lack functioning of formal institutions, the informal institution dominant in the dairy marketing. Institutional, production and marketing challenges for dairy marketing were identified. Thus, besides focusing on important significant variables in the results, policy makers should focus on devising appropriate dairy marketing policies, regulations, and rules. In addition to this, efforts should be given to improve the market linkages.