Influence pathways and economic impacts of policy change in the Kenyan dairy sector

This study is an ex post assessment of the impact of the revised Kenya dairy policy. It outlines the policy change process, investigates induced behavioral changes at the levels of field regulators and SSMVs (small-scale milk vendors), and estimates economic impacts on producers, SSMVs and consumers. It also provides a strategic assessment of the research and coordinating roles played by ILRI, recognizing that ILRI was only one partner in a complex project with many people and organizations involved, and estimates how much of the overall gains can be attributed to this research/coordination component. It was designed to evaluate the impact of a revised Kenyan dairy policy that encouraged relevant government agencies to engage with SSMVs and, in particular, to explore and analyse the role that research/coordination played in contributing to the policy change and the net benefits to the investment in the policy research component. The study describes the policy, institutional (in the broad sense of ‘rules of the game’) and behavioral changes that have occurred in Kenya’s dairy sector and how they occurred and what role the research and coordination component of SDP (Smallholder Dairy Project) played. It quantifies transaction costs and evaluates how reduced transaction costs have impacted the prices paid by consumers and those received by producers. It measures the overall economic benefits of the policy change to consumers, producers and SSMVs, and presents a counterfactual situation, depicting what might have happened if SDP had not been implemented and the dairy policy had not changed.