DETERMINANTS OF MILK MARKET SUPPLY AND MARKETING CHANNEL CHOICES: THE CASE OF SODDO ZURIA DISTRICT, WOLAITA ZONE OF SOUTHERN ETHIOPIA

This study set out to assess the determinants of milk market supply and channel choices in the study area of Sodo Zuria district of SNNPR, Ethiopia. The study employed two-stage sampling technique to draw 120 sample respondents. Simple descriptive statistical analysis such as mean, standard deviation, percentage, and multiple linear regression and multivariate probit were used to analyze the data. Based on descriptive statics the major channels identified in the study area were small milk traders’, hotels and individual consumers’ marketing channels with their shares 9%, 34.9% and 56.1% respectively. Multiple linear regression model result revealed that proximity to urban center, number of dairy extension contact, and dairy farming experience affected milk supply positively and significantly while family size affected significantly and negatively. Multivariate probit model result indicated that educational status of household head, number of milking cows, proximity to urban center, total land holding, grazing land, family size and sex of household head significantly and positively determined channel choices. In multivariate probit model, the value of chi-square 125.25 indicates that separate estimation of choice of the market channel is biased and the decisions to choose the three channels are interdependent. Moreover, the model result depicted that the predicted probability of choosing small traders channel was 39.3% which is relatively lower than individual consumers (52.8%) and hotels channels (52.4%). The likelihood of producers jointly to choose the three channels was success (33.2%) and failed (10.1%). Therefore joint probabilities of success or failure to choose the three channels suggest that households are more likely to succeed to jointly choose the three channels.