| Livestock Research for Rural Development 23 (1) 2011 | Notes to Authors | LRRD Newsletter | Citation of this paper |
The draft sessional paper on dairy industry development of 2006 which is yet to be enacted in parliament repeals the dairy policy of 1958. If enacted into new policy, the standards of camel milk will be defined and camel milk will be recognized as a dairy product in Kenya. This means that the camel milk will be marketed to new areas and to people who have not consumed it before. This study undertook to investigate the potential consumers’ willingness to pay for camel milk. A multistage sampling technique was used for data collection. The effects of socio -economic characteristics of potential consumers on willingness to pay were analyzed using the logistic regression model.
Results show that the likelihood of willingness to pay for the camel milk amongst potential consumers who are aware of camel milk being processed and consumed elsewhere is three times more than those who are not aware. Other than awareness, employment status, total household income, age, level of education and family size have no significant effect on willingness to pay. The potential consumers are willing to pay a 7% premium on the camel milk above the price of a unit volume of camel milk. The implication of these findings are that irrespective of other factors, the potential consumers are willing to pay for camel milk so long as they are sensitized widely and prices charged do not exceed 7% of the existing cow milk prices at any given place.
Key words: Awareness, potential consumers, premium
Kenya’s total land area is estimated at 569,140 km2 (FAO 2007) of which only about 20% is suitable for arable agricultural production (Ngugi and Nyariki 2005).About 80% of Kenya is classified as semi- arid and arid areas(ASALS) characterized by low, unreliable and poorly distributed rainfall. This expansiveness of Kenya’s ASALs suggests their economic importance for the country. It is estimated that ASALS support about a quarter of the country’s total human population estimated at 38.5 million (World Bank 2008) .The ASALs are also home for 60% of the livestock population and the largest proportion of wildlife (Government of Kenya 1994 cited in Ngugi and Nyariki 2005).
Livestock production is an important component of the agriculture sector accounting for about 47% of the agricultural Gross Domestic Product( GDP), or an equivalent of 12% of the National GDP. According to FAO (2008) estimates, the livestock populations by species are:- 14 million cattle, 10 million sheep, 15million goats, 1.1 million camels 330,000 pigs,1800 horses and 30 million chicken. According to the Draft Sessional Paper on Dairy Industry Development (2007), Kenya is one of the largest producers of dairy products in Africa, with cattle accounting for 88% of the milk produced whereas camels and goats account for the remainder. From a global perspective, the economic significance of camel production is minimal in comparison with that of other domestic animals. Nevertheless, in Africa, especially in East Africa and Sahel countries, the camel population makes a significant contribution to national economies.
The camels are very reliable milk producers during dry seasons and drought years when milk from cattle, sheep, and goats is scarce. At such times camel can contribute up to 50% of the nutrient intake of the pastoralists. The volume of camel milk produced per annum in the world is 1.64 MT, Africa contributes 1.46MT and Kenya alone produces 0.027MT (FAO 2008). It is noted by the draft sessional paper on dairy industry development that previous dairy policies and other interventionary initiatives placed too much emphasis on dairy cattle and too little to other milk producing livestock species such as goats and camels despite their respective potential to provide special milk of high nutritive value and to adapt to ASALs (GOK 2007).
Camel milk is traditionally consumed raw by pastoralists. For a long time, camels were kept for subsistence and only a limited amount was being sold. Due to changing lifestyles in the ASAL as a result of urbanization, population increase and insecurity in the lowlands where camels are concentrated, the demand for camel milk has increased. The pastoralists now sell camel milk as an income generating activity (Farah 1996). The bulk of marketed milk reaches the consumers through informal marketing channels (Matofari 2007). The milk is usually sold raw and in small quantities over varying distances from source to the market, ranging from 20 to 400 km.The draft sessional paper on dairy industry development recognizes the role of camels in milk production, especially in the ASALS (GOK 2007). It also proposes to examine how the product chain can best meet consumer needs at affordable prices while ensuring acceptable returns to the industry players.
This paper undertook to investigate and analyze the factors that influence the willingness to pay for camel milk by the potential consumers with an aim of informing the marketing process.
The study was conducted in Nakuru municipality, Nakuru district in Rift Valley Province, Kenya which lies on geographical position 0◦30׳s36◦0׳E. The municipality has ahuman population of 23,515(GOK 1999). Nakuru is currently the fourth largest urban centre in Kenya and lies 1850 metres above sea level. Agriculture, manufacturing and tourism are the backbone of the economy of Nakuru. The area surrounding the town is known for its vast agricultural enterprises. The main crops grown around Nakuru and marketed in town include coffee, wheat, barley, maize and beans. Dairy farming is the key economic activity and provides the inputs for the processing plants around town. The town is also centre for retail businesses that provide goods and services to the manufacturing and agricultural sectors. Tourism is an important economic activity in Nakuru town. The town and the region are endowed with vast resources that make tourism a key income source. The town is populated by people from all over Kenya and from many regions in the world. Although the town population is predominantly African, it has a cosmopolitan feel.
The sampling unit was the consumer household where we have the main decision makers in purchasing of milk. Lists of household heads of consumer households were obtained from Key informants and the local administrative personnel. Individual respondents were selected from this list. Households at each site were selected based on the accessibility of the homes and willingness of the household respondents to be interviewed.
Nakuru municipality was purposively selected as it was away from the current area supplied with the camel milk and therefore increasing likelihoods of getting the views from respondents who have not consumed this milk before. The area of study was sub divided into three strata based on the living standards of the residential areas as implied by the building materials of the housing structures inhabited. Then from each stratum, households were sampled by simple random sampling proportional to size. A total of 108 respondents were interviewed. Data was collected using structured questionnaires.
Descriptive statistics was used to analyze the socio economic parameters that characterize the potential consumers using SPSS (version 15).
To analyze the determinants of willingness to pay (WTP), the price the potential consumers are willing to pay for camel milk was made the dependent variable.
which include both dichotomous and continuous
variables.
This dependent variable was then transformed into binary variable to generate binary responses whereby the price potential consumers were willing to pay was made 1 when it is higher than what they were paying for a unit of cow milk and 0 if it was lower than what they were paying for a similar unit of cow milk. A logistic regression model expressed as in equation 2 below was used to establish the factors that determine whether a potential consumer was willing to pay more for the camel milk than he was paying for the cow milk at the time.
Where P is the probability that Y = 1 and 
are
the set of explanatory variables.
It is observed that there was diversity in terms of ethnic affiliations of the potential camel milk consumers reached (Table 1). Eleven different ethnic groups were interviewed. The commonly used outlet for their cow milk is the retail kiosk.
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Table 1: Qualitative Socio economic characteristics of the potential consumers |
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|
Variable |
Frequency |
Percent |
|
Gender Male Female |
38 70 |
35.2 64.8 |
|
Ethinicity Kikuyu Luhya Luo Teso Kamba Kisii Sudanese Kalenjin Meru Mijikenda Cushite |
45 16 25 2 5 8 1 3 1 1 1 |
41.7 14.8 23.1 1.9 4.6 7.4 0.9 2.8 0.9 0.9 0.9 |
|
Employment status Formal Informal Not engaged |
13 53 42 |
12 49.1 38.9 |
|
Outlet where cow milk is bought Supermarket Farmer supplier Hawkers Retail kiosks Own farm |
5 16 4 78 5 |
4.6 14.8 3.7 72.2 4.6 |
|
Awareness on processing of camel milk Yes No |
85 23 |
78.7 21.3 |
|
Income level of the household <500 5001-10000 1001-15000 15001-20000 20001-25000 >25000 |
7 36 15 11 8 30 |
6.5 33.3 13.9 10.2 7.4 27.8 |
|
Religion of the respondent Catholic Protestant Muslim Traditional Pentecostal |
31 64 8 2 1 |
28.7 59.3 7.4 1.9 0.9 |
|
Source: Authors survey, 2009 |
|
|
Three main religious groups which comprised of the protestants, catholics and muslims were included. Most of the respondents were aware of camel milk being processed in some parts of the country for human consumption. Among all the respondents, the most common way or channel from which awareness was created in order of importance is neighbours who talk about the camel milk, through school, and visits or contact with the production areas (Figure 1). The use of television as a media of awareness creation of camel and its products such as milk has not been embraced in Kenya.
 |
|
Figure 1: Sources of information on camel milk for potential consumers (Author’s survey 2009) |
Based on the frequency of purchase, the potential consumers are regular consumers of milk .The price they are willing to pay for camel milk is slightly higher than what they are currently paying for cow milk (Table 2). The difference of cow milk price from the average price the potential consumers is willing to pay for camel milk is Ksh2.31 per litre, meaning that the potential consumers are willing to pay a premium of 7%.This result is consistent to the results obtained by Juma et al (2006) when they found that those willing to pay the price bid for small ruminant meat were ready to pay 7.6% above the current price.
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Table 2: Quantitative characteristics of potential milk consumers (n=108) |
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|
Variable |
Mean |
Std. Deviation |
|
Age of respondent |
32.1 |
10.8 |
|
Number of children below ten |
1.21 |
1.20 |
|
Frequency of purchase of cow milk |
6.63 |
1.23 |
|
Quantity of cow milk purchased per week in Litres |
8.79 |
5.55 |
|
Price per unit litre of cow milk |
32.6 |
8.92 |
|
Price consumer is to pay for camel milk per litre |
34.9 |
12.7 |
|
Quantity of camel milk to be purchased per week |
8.85 |
8.43 |
|
Total household expenditure per month |
21253 |
18696 |
|
Total number of household numbers |
4.48 |
1.92 |
|
Number of years of schooling |
11.9 |
2.65 |
|
Source: Authors survey, 2009 |
||
The log likelihood of the fitted model is -50.3 and from this value we can reject the null hypothesis that all the regression coefficients are simultaneously equal to zero. The likelihood ratio on the other hand is 21.78; (degrees of freedom = 12) and the p value is 0.016. These two statistics help us to reject the null hypothesis that all regression coefficients across the model are simultaneously equal to zero. Lastly the McFadden’s pseudo R2 was 0.18.This can be approximated to 0.2.This is within the highly satisfactory range of 0.2 to 0.4.
The Logistic regression results estimates of the factors that determine willingness to pay for camel milk indicate that considering 5% level of significance only one variable(awareness) is significant.
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Table 3 Logistic Regression results estimates |
|||
|
Variable |
Odds Ratio |
z |
P>(z) |
|
Gender Log Household size Log household expenditure Log price to paid for camel milk Log quantity of cow milk purchased per week Log number of years of education Log age of household head Total household income Employment status Awareness |
2.61 3.47 0.659 0.828 0.416
0.253 1.36 1.46 3.24 |
1.58 1.88 -0.61 -0.14 -1.84
-1.57 1.13 1.25 2.01 |
0.115 0.060** 0.540 0.891 0.066**
0.116 0.260 0.213 0.045* |
|
Model summary:
Number of observations =106 ; LR chi2(10) = 21.78; Prob
> chi2 = 0.0163; Log likelihood = -50.31; Pseudo R2
= 0.18 |
|||
The above results show that those potential consumers who are aware of camel milk being processed for consumption are more willing to pay for the camel milk than those who are not aware. From the odds ratio, the likelihood to pay for those who are aware is three times more than those who are not aware. This result is in contrast to the results by Keter (2006) who found that awareness on genetically modified (GM) maize was not significant and it did not influence the willingness to pay (WTP). This difference could be attributable to the beneficial qualities of the camel milk as compared to the negative benefits of GM foods in general that dominates the global debate.
In India, it is observed that while the camel breeders have always drunk camel milk, the general public is often reluctant to entertain the idea of consuming camel milk. Drynet (No date) noted that awareness raising and education of consumers about the beneficial effects of camel milk has established demand for fresh camel milk especially by diabetic patients. This approach can be replicated in other camel breeding countries including Kenya.
Gender has a positive effect non significant effect on WTP for camel milk.The result is in disagreement interms of statistical significance with the econometric modeling results from the conventional mail out survey method reported by Carberg et al (2007) on WTP for branded beef in Canada that showed that gender (male) exerted a positive and statistically significant effect upon WTP for the three brands of beef out of the four that were being studied..
Age had a positive non significant effect on WTP for the camel milk.This is also partly in disagreement interms of statistical significance and effect with the canadian results because for the branded beef study, age was found to cause WTP for branded beef to be lower with coefficients being statistically significant for each of the four brands and the existing grade named Canadian A AA. The difference in relation to effect of age on WTP in the two studies could be attributable to the desire of the ageing group of potential consumers wanting to consume camel milk for purposes of deriving the medicinal benefits outlined during the survey exercise, where as reluctance of the older generation to adopt new beef brands may be explained by Carlberg et al (2007) who states that as age increases, consumers are simply not as interested in trying premium products in a food category that may be regarded as a staple of their diet.
Total household income, level of education and family size had non significant effect on WTP for the camel milk. It is only this result that is consistent with the findings of Carberg et al (2007) that also indicated that education level, family size and income had no statistically significant effect on WTP for any of the beef brands.
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Received 23 July 2010; Accepted 22 September 2010; Published 5 January 2011