The role of in-kind credit on milk productivity among smallholder dairy farmers in Malawi: a case study of Lilongwe and Mzuzu milkshed areas

A study on the role of credit on milk productivity among credit participant and non credit participant dairy farmers in Malawi was conducted in Lilongwe milk shed area, Central Malawi and Mzuzu milk shed area, Northern Malawi. The milk-shed areas were chosen because of a high concentration of smallholder dairy farmers some of whom receive credit support for livestock production from two major NGOs, namely Land O’ Lakes and Small Scale Livestock Promotion Programme. The study was conducted in two phases namely, cross-sectional survey and observational study. The cross-sectional survey involved the use of a structured questionnaire which was administered to 305 randomly selected dairy farmers. Data were collected on household characteristics, milk yield estimates, numbers of animals, breed types, calving intervals, numbers of services per conception, calf survival, resource endowments, milk disposal and marketing, credit participation status, management levels, indications of input use and costs for the purpose of selecting those to be included in monitoring survey. SPSS programme version 12 was used to generate descriptive statistics such as frequencies, means, and graphs and cross tabulations of the socio-economic variables, while General linear model of SAS was used to determine any significant differences in average milk, calving interval, number of services per conception among credit participants and non credit participants. Observational study involved 60 farmers for a period of six months, and the data included feed intake by cows, water, labour and amount of concentrates fed. Cobb viii Douglas production function was used to analyze the extent of effect of the physical factors of production that form part of in-kind credit and finally gross margins were obtained for credit participants and non credit participants to verify the economic returns of in-kind credit. Results revealed that milk production of the credit participants were significantly higher per day per animal compared to non credit participants probably due to regular availability of dairy technologies through in kind credit. Furthermore, productive parameters (technologies used) were all significantly influenced by borrowing status (P<0.05). These included breed of cow used, method of breeding, feeds (supplementation and improved forage), method of grazing, housing and drug availability. On the other hand, reproductive parameters and their associated problems such as number of services per conception (3.1 vs 1.6) and calving interval (15.0 vs 13.9 months) were higher in credit participating than in non credit participating group and the differences were significantly different (P<0.05). However the production function indicated that forage, concentrates and water which forms part of the in-kind credit had a statistically significant positive relationship to milk output (P<0.05). Finally economic analysis recorded higher gross margins for the credit participants irrespective of breed than to the non credit participants. This gives evidence that credit had an important role to play in improving milk yield hence increased returns. Therefore, it is recommended that in-kind credit should be continued by government and other NGOs as a way of increasing productivity of dairy cattle.
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Region Focus: 
Southern Africa
RUFORUM Theses and Dissertations
Licence conditions: 
Open Access
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