Quantifying the economic impacts of a policy shift towards legalizing informal milk trade in Kenya

This study quantifies the impacts resulting from a significant policy change associated with ILRI’s collaborative smallholder dairy research and policy advocacy activities: the policy shift toward legalisation of small scale raw milk marketing, in Kenya. A multi-market model was developed to quantify the economic impacts based on data from various datasets collected by ILRI and partners. Model results indicate sharp declines in consumer prices for milk as a result of a decline in small-scale trader transactions costs, with consequent small increases in grain production and farm income that are concentrated among rural and poorer groups.