Determinants of Cow Milk Commercialization in Yabello District, Borana Zone of Oromia National Regional State, Ethiopia

Milk is an important dairy product, particularly in Yabello district and generally in the pastoral area of Ethiopia. It is a source of food and cash income for the majority of the smallholder milk producers. Especially for poor households, transforming the subsistence-oriented production system into a market-oriented production system serves as a way to increase the smallholder farmer’s income and reduce rural poverty. This needs a deliberate improvement in smallholder commercialization decision as well as the level of commercialization to facilitate stable incomes and sustainable livelihoods. This study was aimed at identifying determinants of cow milk commercialization. Data were collected from 154 randomly selected producers in the district through a structured questionnaire. Both descriptive statistics and econometric models were used to analyze the data. The double hurdle model was used for analyzing cow milk market participation (first hurdle) and determinants of cow milk commercialization (the second hurdle). In first hurdle, the result of Probit Regression Model revealed that owned (TLU), Cooperatives membership, production experience, market place, availability of labor force (Adult equivalent) and age of the household head played a significant role in cow milk market participation. In the second hurdle, the result of Truncated Regression Model revealed that out of explanatory variables used in the model; cow owned (TLU), milk production experience (year), market distance and age of household were found to significantly influencing the cow milk commercialization of producers in the study areas. Therefore, focuses are needed to support households in the study area for dairy commercialization in the study area. Especially, focus should be given to the improvement of a market place for milk product, supporting cooperative, market distance and cow owned which determines the cow milk commercialization of producers in the study area