A study of the benefits of forward vertical integration in dairy farming operations: A case of Nharira Dairy from 2010 - 2012

Abstract

The aim of this study is to find out if members of Nharira dairy project are benefiting from the forward vertical integration strategy pursued by their organization. The reason for carrying out this study is that Nharira dairy project is beset with a number of problems which include declining revenue against a background of escalating costs, decline in milk intake and failure to fulfill customer requirements, decline in the number of registered members and failure of the project centre to repair the dairy infrastructure despite a number of intervention measures. The objectives of this study are: to assess the perception of Nharira dairy farmers on the benefits of forward vertical integration in dairy farming operations; to determine the nature of costs and returns from forward vertical integration by Nharira dairy farmers; to determine a turnaround strategy for Nharira dairy farmers that takes into account dairy farming management; to determine whether forward vertical integration by Nharira dairy farmers is addressing issues of dairy farming technology; and to assess how forward vertical integration by Nharira dairy farmers is addressing issues of environmental sustainability. A case study approach is used in this investigation. Stratified random sampling is used in this study to select a representative sample of farm owners, administration and staff, workers and family members. Research findings indicate that Nharira dairy farmers perceive forward vertical integration as beneficial. The researcher concludes that Nharira dairy should continue with its forward vertical integration strategy. The researcher recommends further study in how forward vertical integration in dairy operations can assist in addressing issues of environmental sustainability in the Nharira farming community.