Factors influencing choice of milk outlets among smallholder dairy farmers in Iringa municipality and Tanga city

The global markets are increasingly being integrated due to globalization and liberalisation. Drastic changes prompted by technological change are daily transpiring in the agricultural produce marketing which put smallholder farmers’market survival at stake. The notable changes are manifested in terms of value addition and product differentiation. This study was undertaken to identify factors that determine milk value chain choice amongst smallholder dairy in Iringa and Tanga urban. The specific objectives were: to assess and compare profitability between informal and formal milk value chain participants; examining factors that influence choice of milk marketing channels/outlets among smallholder dairy farmers. Purposive and random sampling techniques were employed in selecting 160 smallholder dairy farmers and 62 middlemen. Both descriptive and quantitave techniques (Gross Margin and Multinomial Logistic Regression) were used in data analysis. The enterprises’ profitability between dairy farmers selling milk through the informal and formal milk channels was statistically different (P< 0.05), implying that informal milk channel is shown significantly being more profitable than the formal channel, with a mean difference of 385.00 TZSper litre. The Multinomial Logistic results show that, the highly statistically significant variables at 1% (P