Risk perception and risk coping strategies for typical and entrepreneurial dairy farms in Narok-Bomet and Nyandarua counties, Kenya

Abstract

Dairy farming in Kenya faces multiple risks that impact production performance. Risk perception is likely to differ between typical and entrepreneurial farms, and the difference likely manifests in their choice of risk coping strategies. This study examined how typical and entrepreneurial farms perceive and cope with risks in Nyandarua County - representing a more developed dairy sector, and Narok-Bomet Counties, representing a less developed dairy sector. It is assumed that typical and entrepreneurial farms perceive and cope with risks differently with entrepreneurial farms adopting sophisticated and resource intensive strategies. Using stratified sampling method, cooperatives were identified and a list of farmers selling to the cooperatives were categorized as typical if they sold up to 50 litres of milk with no increase over the last 5 years. Otherwise were entrepreneurial farmers if they consistently sold over 50 litres of milk with growth over the same period. A cross sectional survey was done across 120 farmers out of whom 56 were typical and 64 entrepreneurial where each farmer was asked to list top three severe risks and the coping strategies per risk. Data analysis used Microsoft Excel and SPSS version 23. Risk perception indices revealed that both typical and entrepreneurial farmers considered market price volatility (0.375, 0.346) the most significant risk, followed by production-related threats such as disease (0.116, 0.143), feed scarcity due to limited land (0.158, 0.078) and due to extreme weather (0.0833, 0.1016), poor genetics and reproduction (0.027, 0.094) and difficulties in accessing inputs and services (0.131, 0.125). Through Principal Component Analysis (PCA), key coping strategies to these risks were identified in typical farms to reflect reliance on modest innovations, local network and practical responses aligned with available assets. In contrast, coping strategies in entrepreneurial farms were proactive investment in technologies, innovations and partnerships.