Does entrepreneurial orientation influence formal milk market participation? Evidence from smallholder dairy farmers in central Kenya

Smallholder dairy farming in Sub-Saharan countries is characterised by informal milk marketing, which often fails to meet milk quality standards, resulting in milk losses and low milk prices. Formal milk marketing, particularly dairy cooperatives, presents a viable option for improving smallholder welfare through stable prices, market access, and quality control. However, participation in this formal milk market remains low. This study assesses the determinants of formal milk market participation among smallholder dairy farmers from Central Kenya. The analysis incorporated entrepreneurial orientation constructs to determine their influence on decision-making. Moreover, gender was interacted with selected entrepreneurial orientation, socioeconomic, and institutional factors to examine whether their effects on formal market participation differed between male and female farmers. A binary probit model was used to determine the factors influencing participation in formal milk markets. This study was conducted between October and November 2023 and involved 385 respondents. The results show that risk-taking (P < 0.05) and autonomy (P < 0.01) positively and significantly influenced participation in the formal milk market for both genders. Education (P < 0.05), off-farm income (P < 0.05), group membership (P < 0.01), and access to extension services (P < 0.01) significantly increased formal milk market participation, especially for female farmers. These findings underscore the need to enhance farmers’ entrepreneurial skills through training, with particular emphasis on targeted support for female farmers. Females often face structural constraints, including limited resource access, market information, and decision-making power. Providing financial and technical assistance, along with strengthening social networks, can help overcome these barriers and improve their participation in formal milk markets.