Kenyan Dairy Policy Change: Influence Pathways and Economic Impacts

SummaryMarketing, transporting, processing, and consuming dairy products contribute significantly to the livelihoods of many poor Kenyan households. This study analyzes the impact of recent research supporting policy changes to liberalize informal milk markets. The study found that behavioral changes in dairy sector participants arising from the research evidence-supported policy and regulatory changes led to an average 9% reduction in milk-marketing margins, and a significant increase in the number of licensed small-scale milk vendors. High welfare benefits arising from the policy change, with a net present value of US$230 million, are captured by consumers, producers, and milk vendors.