Understanding the drivers of smallholder dairy cooperative participation in developing countries: Evidence from rural Zambia

Abstract

CONTEXT

Smallholder dairy farmers are among the primary dairy producers in developing countries. In Zambia, they contribute more than 80 % of the country's milk production, which amounts to approximately $80 million annually. Understanding the factors that influence smallholder dairy farmers' decisions to join cooperatives is crucial for enhancing cooperative participation and improving dairy production efficiency in the region.

OBJECTIVE

The primary goal of this study is to investigate the determinants of smallholder dairy farmers' decisions to join cooperatives, while also comparing the predictive performance of the random effects logit model and the random forest model in identifying these factors.

METHODS

Data were collected from 515 rural smallholder dairy farmers in Zambia. The analysis utilizes a random effects logit model and a random forest model to identify the factors influencing farmers' decisions to join dairy cooperatives.

RESULTS AND CONCLUSIONS

Three primary findings were observed. First, the RF model exhibited superior predictive accuracy compared to the random effects logit model, aligning with existing literature on the enhanced predictive capabilities of machine learning techniques. Second, several key factors, including physical proximity to cooperative offices, educational attainment, and dairy farming experience, were identified from the random effects logit model as significantly influencing current farmers' decisions to join dairy cooperatives. Third, the random forest model indicated that demographic and economic characteristics—specifically age of the household head, household size, total cow ownership, dependency ratio, and farming experience—are expected to be the most influential predictors of cooperative membership in future scenarios.

SIGNIFICANCE

Findings suggest the need for establishing cooperative offices closer to rural farming communities in developing countries to enhance accessibility and encourage cooperative participation. Policies should focus on improving educational levels and providing accessible knowledge sources through governmental and non-governmental initiatives to foster cooperative membership. Addressing the reluctance of wealthier farmers to join cooperatives requires tailored interventions such as incentives, awareness campaigns, or targeted outreach efforts emphasizing the benefits of cooperative membership across different resource levels.