Evaluating the impact of agribusiness support services on productivity and income among smallholder farmers in rural Kenya: insights from a multinomial endogenous switching regression analysis

Agribusiness support services (ASS) are essential for enhancing the productivity and income of smallholder dairy farmers in Kenya. Despite their importance, many farmers only utilize a limited combination of available ASS, such as production (P), financial (F), cooperative (C), and business plan training (B) services, rather than leveraging the full suite of support. This study examined the impact of different ASS combinations on the productivity and income of smallholder dairy agripreneurs in Murang’a County, Kenya, using cross-sectional data from 682 dairy farmers and a multinomial endogenous switching regression model. The results reveal that, combining services like P1F1B1C1 (production, financial, business plan training, and cooperative support) results in a 7.9-unit increase in milk productivity for users. Income gains were also notable for combinations like P0F1B0C0 (financial support only) and P1F1B1C0 (production, financial, and business plan training), with income increases of KES 12,184.1 and KES 26,543 for users, respectively. Non-users adopting these services could see potential income gains of KES 1,846.5 and KES 105,150.8, respectively. The study recommends expanding access to affordable credit, integrating financial support with business management training, and improving cooperative and production support programs. Enhancing infrastructure to improve market access and value chain development is also crucial. Tailored interventions for vulnerable smallholder farmers and continuous monitoring of ASS programs are necessary to ensure effective resource allocation and maximize benefits for smallholder dairy farmers.