Factors influencing of smallholder dairy farmers’ choice in milk marketing in the highlands of eastern Uganda: A case study of Namisindwa District

Abstract

Uganda’s dairy sector is among the fastest growing in Sub-Saharan Africa, with annual production estimated at 2.8 billion litres in 2020, contributing about 4% to national gross domestic product (GDP) and accounting for more than half of livestock output. Despite this growth, per capita milk consumption remains critically low at 58 litres, well below the World Health Organization’s recommended 200 litres annually. Although 70% of national milk production is marketed, over 90% flows through informal outlets characterized by weak quality assurance, depressed farm-gate prices, and limited value addition. These inefficiencies erode farmer incomes and reduce incentives for sustained productivity, especially among smallholders. Challenges are pronounced in the eastern highlands, including Namisindwa District, where dairy is integrated into mixed crop–livestock systems but constrained by infrastructural deficits, underdeveloped farmer organizations, and limited access to formal markets. The dominance of informal milk marketing highlights a pressing research and policy gap. While prior studies have examined productivity, processing competitiveness, and marketing dynamics nationally, little empirical evidence addresses the determinants of smallholder participation in milk marketing within the eastern highlands. This gap was salient given structural and institutional differences from surplus-producing regions, including inadequate infrastructure and weaker cooperative arrangements. Generating contextspecific evidence is therefore vital to inform policies and interventions that enhance smallholder participation in structured value chains, improve farmer welfare, and strengthen Uganda’s dairy competitiveness. This study thought to fill these gaps by analysing factors influencing smallholder dairy farmers’ participation in milk marketing systems in Namisindwa District, Eastern Uganda. The specific objectives were: (a) to examine the sociodemographic and institutional characteristics of smallholder dairy farmers; (b) to examine determinants of farmer participation in milk marketing systems; (c) to assess the extent of farmer engagement across formal and informal channels; and (d) to evaluate profitability differentials between farmers engaged in formal versus informal marketing. To achieve these objectives, the study adopts a cross-sectional survey design. Data will be collected from a representative sample of smallholder dairy farmers using structured questionnaires. Descriptive statistics will profile farmers’ characteristics, while multinomial logistic regression will identify factors influencing marketing channel participation. Gross margin and profitability analyses will compare returns between formal and informal systems. The findings are expected to provide robust empirical evidence to guide policymakers, development partners, and value chain stakeholders in designing strategies that foster inclusive, efficient, and sustainable dairy marketing systems in Uganda.