THE ROLE OF CREDIT IN THE ADOPTION AND USE OF IMPROVED DAIRY TECHNOLOGIES IN MALAWI: A CASE OF CENTRAL AND NORTHERN MILK SHED AREAS

Abstract

Dairy farming is seen as potential profitable enterprise for smallholder farmers in Malawi. However, this enterprise is currently characterised by low productivity due to poor feeding, inter alia. To bolster adoption and use of improved feeds extension of credit to farmers is being encouraged. Nevertheless, no detailed research has been carried out to document the linkages that exist between credit and adoption of dairy technology in Malawi. This study was conducted in central and northern milk shed areas. In order to understand the importance of credit in influencing adoption and utilization of improved feeds among smallholder dairy farmers, a total of 301 dairy farmers were proportionately and randomly selected from bulking groups in the two milk shed areas. A tobit model analysis indicated that at 1% level of significance adoption of improved supplementary feeds by smallholder dairy farmers is positively influenced by sex of farmer, education level of the farmer, types of breeds used by the farmer and participation in credit scheme. Overall, the results suggest that smallholder dairy farmers in Malawi are profit oriented and that credit will increase adoption of technologies that will enhance the profitability of farms. As such study recommends that profitability of technologies should be adequately assessed and information provided to farmers if high adoption rates are to be achieved. In addition, affordable credit should be provided to ease the resource constraints faced by most smallholder farmers.