Economic coordination of urban milk value chain: the case of Tanga city
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Date
2013
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Publisher
Sokoine University of Agriculture
Abstract
This study was conducted to examine coordination of milk value chain in Tanga City.
Specifically the study (i) characterizes the milk value chain in the Tanga City (ii)
examines existing governance structures in the milk value chain in the Tanga City (iii)
examines chain efficiency and competitiveness in Tanga City and (iv) carries out the
institutional review of Tanga urban dairying. Cross-sectional research design was used to
collect primary data from 80 dairy farmers, 30 milk traders and 15 consumers. The data
were analyzed using SPSS and STATA. The findings show that the key players in the milk
value chain in Tanga City were producers, cooperatives, processors, input suppliers,
traders and retailers. Five major milk marketing channels were identified. Urban dairying
was observed to be governed by institutional arrangements embedded in the national
Urban Farming Regulation of 1992 (revision 2003) and City by-laws and regulations on
livestock keeping. The analysis of chain governance structures indicated incidences of
contract failure between primary dairy cooperatives and the Tanga Dairy Cooperative
Union (TDCU) and between TDCU and the major processor Tanga Fresh Ltd. Basing on
the Herfindahl-Hirschman Index, the dairy industry in Tanga City was found to be highly
concentrated making it inefficient and uncompetitive. The Gini coefficient for market
share between the actors was 75.43% indicating a high level of inequality. GM analysis
indicates that producers in the formal channel are less profitable than those in the informal
channel, though the difference is not statistically significant. It is recommended that the
concerned governmental and non-governmental bodies review the price setting
mechanisms in the industry to make ensure that offered producer price is cost-effective, an
intervention that will also enhance competitiveness of milk marketing in the city and in
other urban dairying centres countrywide.
Description
Masters Dissertation
Keywords
Urban milk value chain, Tanga city