Strategic market-based interventions and price volatility in the dairy sector: a case of Kiambu county, Kenya

                @article{CRSIJ26000240,
                  author = {Eugene Aluku},
                  title = {Strategic market-based interventions and price volatility in the dairy sector: a case of Kiambu county, Kenya},
                  journal = {Cosmo Research and Science International Journal},
                  year = {2026},
                  volume = {2},
                  number = {1},
                  pages = {741-748},
                  issn = {3108-1584},
                  url = {https://cosmorsij.com/published/CRSIJ26000240.pdf},
                  abstract = {Dairy farmers, particularly smallholders in Kenya, experience continuous price fluctuations which negatively impact on their income security, investment and production planning. The study focused on five strategic market-based interventions, namely forward contracting, price insurance, market intelligence systems, cooperative bargaining capacity and product diversification strategies, and their impact on price volatility of smallholder dairy farmers in Kiambu County, Kenya. The study utilized descriptive cross-sectional survey design with the theoretical framework of Price Theory, Risk Management Theory, Collective Action Theory and Market Information Theory. Structured questionnaires were filled out with smallholder dairy producers and cooperative officials, with 430 questionnaires sent out and 172 (40.0%) returned. The data was analysed, descriptive statistics, Pearson correlation, and multiple linear regression were used, respectively. The overall score of price stability was moderate to low (mean = 3.5, SD = 1.05), and the highest scores were given to farmers' forward contracting, market intelligence systems and cooperative bargaining capacity (mean = 4.5, 4.4, and 4.2 respectively). Multi-collinearity was checked using the diagnostic tests which yielded no value of VIF greater than 1.672. At the bivariate level, only market intelligence systems were found to have a statistically significant negative association with price volatility (r = -.161, p = .036); the other interventions had weak (and not statistically significant) negative associations. Overall, the regression model was not statistically significant (F (5,165) = 1.056, p = .387) and accounted for 3.1% of the variance in price volatility (R² = .031), and none of the five predictors was significant. The results indicate that market-based interventions are not enough to reduce farm price volatility, but the effect of structural, seasonal and institutional factors may be more important. Systemic measures, such as investment in market infrastructure, formal price stabilization policy and participatory insurance arrangements are recommended for the study, along with ongoing farmer-level capacity building.},
                  keywords = {price volatility; strategic market-based interventions; smallholder dairy farmers; forward contracting; cooperative bargaining; Kiambu County, Kenya},
                  month = {July}
        }