CHALLENGES AND OPPORTUNITIES FOR FARMERS IN DAIRY FARMING AGRIBUSINESS IN RUAI AREA- (NAIROBI COUNTY) BY: MILCAH WAMBUI WAMUGUNDA UNITED STATES INTERNATIONAL UNIVERSITY – AFRICA SUMMER 2018 CHALLENGES AND OPPORTUNITIES FOR FARMERS IN DAIRY FARMING AGRIBUSINESS IN RUAI AREA- (NAIROBI COUNTY) BY MILCAH WAMBUI WAMUGUNDA A Research Report Submitted to the Chandaria School of Business in Partial Fulfillment of the Requirement for the Degree of Masters in Business Administration (MBA) Leadership & Management UNITED STATES INTERNATIONAL UNIVERSITY SUMMER 2018 STUDENT DECLARATION I hereby declare that this research project is the product of my own work and it has not been submitted or presented for examination in any other university. Sign ………………………………….. Date …………………………… WAMUGUNDA MILCAH WAMBUI ID - 654114 This project has been submitted for examination purposes for my approval to the project supervisor. Sign ……………………………….. Date ……………………………… PROFESSOR F. NEWA University Supervisor. ii COPYRIGHT This research project is my original work and it has not been submitted or presented for examination in any other university. ABSTRACT The purpose of the study was to determine the challenges, opportunities and strategies for farmers engaged in dairy farming, with a focus on small scale dairy farmers in Ruai Area, Nairobi County. The study aimed at exploring opportunities available for farmers who venture in dairy farming, determining challenges affecting dairy farmers and determining strategies to encourage more farmers to venture in dairy farming enterprise. A descriptive research design was used to provide for observation and description of the behavior of the subjects in an objective manner. The target population were small scale dairy farmers from Ruai, Nairobi County. The research population consisted of 80 small scale dairy farmers at Ruai Nairobi County and through the use of simple random sampling technique, a selection of 67 respondents was determined. Through the use of a structured questionnaire, the study adopted a descriptive and inferential statistics in data analysis and presentation. For descriptive statistics, the study adopted percentage and frequency distribution, cross-tabulation, mean and standard deviation. While for inferential statistics, the study used factor analysis, correlation and regression analysis. Data was presented by way of Tables and Figures. The study in the first objective explored how opportunities available for farmers who venture in dairy farming influenced dairy farming enterprise in Ruai, Nairobi County. The study found that farmers who are more innovative enhance their level of income. The study also revealed that effective extension services provide farmers with information that helps them to iii optimize their use of scarce resources. Technology in agriculture provides important information to famers to enhance agribusiness. From the study, it was illustrated that dairy farmers go for trainings on how to enhance milk production. The study also found that technologies assist farmers to balance and manage food and herds. The study in the second objective established the challenges affecting farmers who venture in dairy farming. The research found that prevalence of various animal diseases is a challenge to milk production. From the study, it was revealed that increasing feed prices has cause constraints to increase milk production. The study established that low fertility reduces the profit by decreasing the average milk production and the number of calves per cow per year. The study also illustrates that most of the poor farmers do not have financial means required to make the initial investment and acquire the associated technological inputs. Small scale dairy farmers were found to experience inadequate animal feed resources and this problem of inadequate feed is as a result of the limited land available for pasture establishment. The study in the third objective determined strategies to encourage more farmers to venture in dairy farming enterprise. The study found that farmers should encourage the use of artificial insemination (AI) to enhance the quality of breeds. Dairy cattle must be provided with water throughout. The study reveals that improving market access to dairy product creates an opportunity for enhanced dairy production. The study demonstrated that dairy farmers should focus on prevention and control of risk factors in cattle and be trained on milk production systems by qualified individuals who understand the whole dairy farming system. To enhance dairy farming, the study found that dairy animals should be given certain foods for body maintenance and for production. The study found that small scale dairy farmers can get high producers cattle through genetic improvement of their existing herd. The study revealed that developing credit facilities for small scale dairy farmers enhances productivity. The study concludes that technology in agriculture provides important information to farmers to enhance agribusiness hence dairy farmers who embrace technology are more innovative and this enhances their level of income. The study also concludes that prevalence of animal diseases is the greatest challenge dairy farmers experience as far as milk production is iv concerned. Dairy farmers should enhance the quality and quantity of dairy products; they should encourage the use of artificial insemination (AI). The study recommends the small scale dairy farmers to embrace technology in farming as it has been approved to be of more beneficial to farmers by enhancing the quick access to information about dairy farming, facilitating accessibility to the markets, and enhancing the quality and quantity of dairy products. The study also recommends the access to pertinent information about animal diseases and preventing them through the utilization of veterinary services. Dairy farmers should embrace the use of artificial insemination (AL) to enhance the quality and quantity of dairy products. v ACKNOWLEGDEMENT First and foremost, I would like to thank GOD for giving me the strength and patience needed to complete this project. Also I would like to extend my deepest gratitude to my family, my university supervisor and my classmates for giving me the support and prayers I needed to complete this project. Last but not least I thank all my farmers in Ruai area, Nairobi county for their great cooperation. Thank you again and may GOD bless you all. vi DEDICATION This study is dedicated to my entire family who lovingly endured the long hours of sleepless nights while compiling the document. Thank you all for the patience. vii TABLE OF CONTENTS STUDENT DECLARATION ................................................................................................... ii COPYRIGHT ........................................................................................................................... iii ABSTRACT ............................................................................................................................. iii ACKNOWLEGDEMENT ....................................................................................................... vi DEDICATION ........................................................................................................................ vii TABLE OF CONTENTS ....................................................................................................... viii LIST OF TABLES .................................................................................................................... x CHAPTER ONE ....................................................................................................................... 1 1.0 INTRODUCTION ......................................................................................................... 1 1.1 Background of the Study ............................................................................................... 1 1.2 Statement of the Problem ............................................................................................... 5 1.3 General Objective .......................................................................................................... 5 1.4 Specific Objective .......................................................................................................... 5 1.5 Significance of the Study ............................................................................................... 6 1.6 Scope of the study .......................................................................................................... 7 1.7 Definition of Terms........................................................................................................ 7 1.8 Chapter Summary .......................................................................................................... 9 CHAPTER TWO .................................................................................................................... 10 2.0 LITERATURE REVIEW ............................................................................................ 10 2.1 Introduction .................................................................................................................. 10 2.2 Opportunities Available in Dairy Farming .................................................................. 10 2.3 Challenges in Dairy Farming ....................................................................................... 16 2.4 Strategies to Encourage Dairy Farming ......................................................................