The Effects of Revolving Funds on Milk Yields in Kenya
Norah Chepkirui *
Department of Agricultural Economics and Agribusiness Management, Egerton University, P. O. BOX 536-20115, Egerton, Kenya.
George Owuor
Department of Agricultural Economics and Agribusiness Management, Egerton University, P. O. BOX 536-20115, Egerton, Kenya.
Lawrence Kibet
Department of Economics, Egerton University, P.O.BOX 536-20115 Egerton, Kenya.
*Author to whom correspondence should be addressed.
Abstract
The study primarily aimed at determining the effects of revolving funds on milk yields among smallholder dairy farmer groups in Bomet County, Kenya. A cross-sectional quantitative data from 288 sampled dairy farmers, both the adopters and non-adopters of revolving funds was used. Propensity score matching technique was employed and the study results demonstrated that adopters of revolving funds had no significance difference with the non-adopters. This contradicts with the theory of credit access and the possible explanation could be the diversion of these funds to other non-farm sectors. Hence it is recommended that factors inhibiting maximum absorption of farm credit in the farm sectors should be considered by the policy analysts. Specifically, a policy debate of whether to give cash or farm input should be reinforced to ensure that monies set for input purchases are directed to the intended sectors.
Keywords: Revolving funds, propensity score matching, treatment, milk yields