Livestock Research for Rural Development 26 (2) 2014 Guide for preparation of papers LRRD Newsletter

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Profitability and contribution of small-scale dairy goat production to income of smallholder farmers in Babati and Kongwa districts, Tanzania

S W Chenyambuga, M Jackson, E E Ndemanisho and D M Komwihangilo*

Department of Animal Science and Production, Sokoine University of Agriculture, Morogoro, Tanzania.
* Tanzania Livestock Research Institute, P.O Box 202 Mpwapwa, Tanzania


A study was carried out in Babati and Kongwa districts in Tanzania to assess the profitability and contribution of dairy goat enterprises to household income of small-scale farmers. A household survey was conducted to a total of 40 dairy goat farmers and 40 non-dairy goat keepers from four villages in each district, making a sample size of 160 households. Non-dairy goat farmers were included as a control group to ascertain the benefits of keeping dairy goats. Information on main economic activities, reasons for keeping dairy goats, input costs and revenues obtained from dairy goat production, livestock production (apart from dairy goats), crop production and small business enterprises were collected using a well structured questionnaire.

The major economic activities in the study areas were both crop and livestock production. Dairy goat production was ranked second to crop production. The main reasons for keeping dairy goats were milk production for home consumption, generation of income, provision of manure and serving as an insurance against future uncertainties. Average annual profit of dairy goat enterprise per household was higher in Babati  than in Kongwa. The dairy goat enterprise contributed 30.8 and 25.7 % of the total household income in Babati and Kongwa districts, respectively. The income from crops, other livestock species and petty businesses were higher for dairy goat farmers than non- dairy goat farmers in both districts. The income from goat enterprise was used to pay school fees, buy consumer goods, buy food during period of food shortage and pay medical bills. The study revealed that dairy goat enterprise is profitable and significantly contributes to household income.

Key words: farming system, gross margin, manure


In Tanzania dairy goats were introduced in early 1960s by the government and the breeds imported were Saanen, Anglo-Nubian and Toggenburg (Das and Sendalo 1991). Early efforts concentrated on rearing dairy goats in missionary centres and government institutions. In the first half of 1980s many non-governmental organisations (NGOs), church organisations and research institutes/Universities started to introduce European dairy breeds into villages across the country (Kiango 1996). The most important institutions involved in distribution of dairy goats to small-scale farmers in rural areas were Heifer Project International (HPI) - Tanzania, FARM AFRICA, church based organisations and Sokoine University of Agriculture. The impetus for these institutions to promote smallholder dairy goat production was to contribute effectively to poverty alleviation and improve food security among the rural poor people. Moreover, introduction of dairy goat breeds in rural areas was aimed at upgrading the local breeds and increase their growth rates, milk yield and hence, improve food security as well as household income (Peacock 2008). On-farm dairy goat keeping at community level did well as opposed to the on-station based approaches (Eik et al 1985). This led to increased interest on the strategy of using dairy goats as a tool for poverty reduction and combating malnutrition by government and non- governmental organizations (Ogola et al 2010). In recent years, dairy goats have gained popularity as a source of milk and income, particularly to the poor people and their milk is normally consumed at household level (Shirima 2005; Tadele 2007). Dairy goats are named as “poor man’s cow” for the poor farmers because of low initial and maintenance costs which can be afforded by small-scale farmers, and they can be looked after by any member of the family, even children.

In 1989 FARM AFRICA, a Non- Governmental Organization specializing in agricultural and rural development, introduced dairy goats in Babati district and set up a crossbreeding programme for upgrading local goats. The project introduced a dairy goat breed, namely Toggernburg. On the other hand Heifer Project International (HPI) -Tanzania and Word Vision- Tanzania introduced Saanen, Ango-Nubian and Toggenburg goats in Kongwa district since 2000. In both districts the aim of introducing dairy goats was to assist low income families to improve nutrition and increase income of the households. All organisations used goat credit system or loan in kind policy in distributing dairy goats to small-scale farmers. Under this system a farmer is given a pregnant female goat under the condition that when the doe gives birth the first and third female kids must be returned to the organisation which in turn gives to other farmers.

Dairy goat enterprise is an important avenue for poverty reduction of small-scale farmers due to its contribution to income generation through sale of milk, milk products, live animals and manure. Income from such production often accrues to women, who use the money to provide better nutrition and education to their children (World Bank 2001). Furthermore, dairy goats are an alternative source of milk to most rural people who cannot afford keeping dairy cattle. Accoding to Haenlein (2004) the consumption of goat’s milk reduces malnutrition among poor people in developing countries and goat milk is tolerated by people with gastro-intestinal disorders. Also most of the small-scale farmers have limited access to land and capital, and so the rearing of dairy goats using common property resources at least gives them an opportunity to improve their income position (Riethmuller 2003).

The economic contribution of small-scale dairy goat production to farmers’ livelihood improvement has not been rigorously studied in Tanzania. Moreover, information on the profitability of dairy goat enterprises under smallholder production system is lacking . Using data from a field survey in Babati and Kongwa districts, the current study examined the contribution of rural dairy goat production to income improvement of small-scale farmers. The main objective of the study was to determine the profitability of dairy goat enterprise and its contribution to income and welbeing of rural households in two different environments.

Materials and Methods

Location of the Study

The study was carried out in two districts; Babati (Manyara region) and Kongwa (Dodoma region). Babati district is located between latitude 30 and 50 South of the equator and longitude 350 and 370 East of Greenwich. The area is sub-humid with mean temperature ranging from 220 C to 250C, receives annual rainfall from 500 to 1,200 mm and lies between 950 and 2,450 metre above sea level. The major economic activities in the district are livestock and crop production. Crops grown in Babati district are maize, pigeon peas, beans, bananas and sunflower. Livestock species kept are cattle, goats, sheep, pigs and chickens. Kongwa district lies between latitude 50 30’ and 60 South and longitudes 360 150 – 360 East of Greenwich Meridian. The area lies between 900 and 1,000 metre above sea level and has semi-arid climate with rainfall ranging from 400 to 800 mm per annum and annual temperature varies from 18 to 34oC. The major crops grown in Kongwa district are sorghum, groundnuts, maize, simsim and sunflower. The main livestock species kept are cattle, goats, sheep, pigs, chickens and donkeys.

Data collection

Babati and Kongwa districts were purposively chosen because dairy goat keeping has been practiced for over 10 years and Toggenburg dairy goats are kept in both districts. In each district a purposive sampling was used to select four villages with large numbers of dairy goats, Toggenburg breed in particular. The villages selected were Gijeboshka, Gijedabung, Himiti and Haraa for Babati district, and Mlanga, Ibwaga, Sagara and Mkoka in Kongwa district. Within a village the list of households keeping Toggenburg goats was obtained and used as a sampling frame from which respondents were picked randomly using a table of random numbers. Moreover, random sampling was used to select households without dairy goats in each village. Ten households with dairy goats and 10 households without dairy goats per village were sampled, giving a sample size of 80 households for dairy goat farmers and 80 households for non-dairy goat farmers in the eight villages.

A household survey was conducted to collect data from 80 households which have been keeping dairy goats for at least five years and from another set of 80 non-dairy goat keeping households. During the interview, respondents were household heads or spouses. Data were collected using a questionnaire designed to capture information on demographic variables, main economic activities, reasons for keeping dairy goats, input costs and revenues obtained from dairy goat enterprise and other enterprises (crop production, livestock production (apart from dairy goats) and small business activities) within the household. The profitabilities of dairy goat, crop production, other livestock species and small business enterprises were determined using gross margin analysis. The gross margin for each enterprise was computed as the difference between the total revenue and total variable costs.

Data analysis

Data obtained from the questionnaire were coded and summarized prior to analysis. PROC FREQ of SAS (2000) was employed to analyze the qualitative data. T-test was used to test the significance of the difference of profit of dairy goat enterprises between Babati and Kongwa. F-test in a two way analysis of variance was used to assess the differences in household income between Babati and Kongwa and between dairy goat farmers and non-dairy goat farmers.

Results and Discussion

Household characteristics

Out of the 80 dairy goat farmers interviewed, females comprised 58.8% of the respondents (Table 1). The high percentage of female dairy goat farmers in the study areas is due to the fact that the dairy goat projects were introduced by organisations that focused mainly on women and disadvantaged groups within the community. The present study agrees with Rota and Sperandini (2010) who reported that in developing countries women often have a predominant role in managing small stocks such as goats, sheep and poultry that are housed and fed within the homestead while cattle and larger animals are owned by men. For non-dairy goat farmers, there were more male than female respondents. The high percentage of male respodents for the non-dairy goat group is a reflection that most households are headed by males. This is because of local customs and cultural practices that favour men in ownership of assets and land. In agro-pastoral communities ownership of livestock and land is usually transmitted from the father to the sons through inheritance and often daughters are only taken into consideration if no male successor is available. This situation makes it impossible for a woman to own land and livestock in rural areas. Similar observation has been reported by Bitende et al (2001) that in livestock keeping communities there is strong ethnic background biased against women.

Most of the respondents had primary education, 90% and 86.3% of the dairy goat farmers and non-dairy goat farmers, respectively. This indicates that most people in the research villages are able to read and write, hence, improving goat management through training or provision of extension manuals would be easy. The proportion of farmers with basic education in the present study is higher compared to 71.3% of farmers with formal education reported by Ogola et al (2010) in Kenya.

Tha major economic activities of the farmers in the study areas were crop and livestock production. This was reported by 100% of dairy goat farmers in both districts and 92.5% and 80% of non-dairy goat farmers in Babati and Kongwa, respectively. Household farm size averaged 6.87 and 10.7 acres for dairy goat farmers in Babati and Kongwa, respectively, and 2.97 (Babati) and 11.9 acres (Kongwa) for non-dairy goat farmers. Farm size for dairy goat farmers in Babati district was higher than that of non-dairy goat farmers because some of the income obtained from dairy goat enterprise was used to buy land for cultivation of crops. This agrees with Kosgey et al (2008) who said that 18.0% of income from dairy goat enterprise is spent on farm investment. In Kogwa district, the difference between dairy goat farmers and non-dairy goat farmers was not significant because unlike Babati which is densely populated, Kongwa district is sparsely populated and most households own local cattle, goats and sheep which they use to purchase land for crop farming.

Reasons for keeping dairy goats

Table 2 shows that the first reason for keeping dairy goats was production of milk for domestic use, especially for children, elders and sick people. This concurs with Gurmesa et al (2011) who reported that provision of milk for home consumption is the major reason for keeping goats in Ethiopia. Also a study by Ogola et al (2010) in Kenya and Teufel et al (1998) in Punjab reported similar findings. Generation of income was mentioned as the second reason that motivated farmers to keep dairy goats in both districts. Most farmers reported that cash income obtained from the sale of milk and live animals was used to meet household needs such as paying school fees, medical bills, buying farm inputs and food in case of crop failure. This observation agrees with Kosgey et al (2006) who ranked income as the second important purpose for keeping dairy goats. Provision of manure was the third reason and most farmers said that they use manure to improve soil fertility in their crop farms. All dairy goat farmers that were interviewed accepted that the application of manure in crop fields improves crop yields. Similar findings have been reported by Shirima (2005).

Table 1:  Demographic characteristics of the respondents (mean values [with SE])





 Dairy goat farmers

Non-dairy goat farmers

Dairy goat farmers

Non-dairy goat farmers

Sex of household head




Male (%)





Female (%)





Age of household head (years)

52.6 ± 2.25

44.9 ± 2.09

49.6 ± 1.55

43.2 ± 2.09

Land (acres)

6.9 ±1.34

3.0 ± 0.29

10.7 ±1.5

12.0 ± 2.85






Informal (%)





Primary (%)





Secondary (%)





Tertiary (%)





 Some few farmers kept dairy goats as an insurance against future uncertainties, especially crop failure. In this regard, dairy goats were considered as a means for storing capital, and can be sold in case there is a need of cash to purchase cereals during food shortage period or to pay school fees and medical bills. This is consistent with the observation made by Devendra (2013) that goats occupy a very important biological and socio-economic niche in farming systems making significant multifunctional contributions especially to food, nutrition and financial security, stability of farm households, and survival of the poor in the rural areas.

Table 2: Reasons for keeping dairy goats in Babati and Kongwa districts







Milk for home consumption



Income generation






Insurance for future uncertainties



 Profitability of small-scale dairy goat enterprises

The total variable costs for the dairy goat enterprises were not different between Babati and Kongwa (Table 3). The costs of drugs, feeds, labour and veterinary services were not different. But the costs for breeding and goat house repair/maintenance were higher in Babati than in Kongwa. The average profit per annum per household was higher (Table 3) in Babati district than in Kongwa. The annual profit in Babati exceeded that in Kongwa. The differences in selling prices of live animals and milk in the two districts could be a possible reason for this observation. The selling prices for live animals and milk in Kongwa were lower than that in Babati district (Table 3). This can be attributed to the lack of farmers’ organisations in Kongwa district. Dairy goat farmers in Babati district are organised under Toggenburg Breeders’ Association (TOBRA) which was established in 1999 to manage the breeding stock. The price for live dairy goats are set by TOBRA and farmers sell their animals through the association. This helps the farmers to get higher price for their animals unlike in Kongwa district where dairy goat marketing is not organised and price for live animals is achieved through negoatiation between individual farmers and buyers. The formation of a group with active involvement of the members is considered critical in deveopment projects as the existence of such groups facilitates the delivery of extension services and other information and it is very inefficient for development agents to work directly with single families (De Vries 2008). In addition, the formation of such groups creates social capital in these communities which is a valuable resource for many other activities (De Haan 2001). According to De Vries (2008) it is very worthwhile for NGOs or the government to invest in the development of such groups as they are the foundation for project success in the communities. Thus, there is a need of having dairy goat farmers’ association in Kongwa district.

Dairy goat enterprise is profitable to small-scale farmers and this is in agreement with the findings of Panin and Mahabile (1997) who reported that small ruminant enterprises are profitable and economically viable. According to Ahuya et al (2005) dairy goat enterprises are profitable and have contributed significantly to the improvement of livelihoods of the rural communities in medium to high potential areas of Eastern Kenya. The profitability of dairy goat production emanates from the fact that goats require less feed and they eat tree leaves, grasses, weeds, and agricultural by-products which are of low value, hence, low production costs.

Contribution of dairy goat enterprises to household income

The main economic activities in the study areas were crop production, livestock keeping and petty businesses. Among these enterprises, crop production was ranked as the first most important economic activity and contributed 44.9 and 50% of the household income of dairy goat farmers in Babati and Kongwa, respectively (Table 4). Dairy goat production ranked second to crop farming and contributed 30.8% in Babati and 25.7% in Kongwa to the household income. This is in agreement with the observation made by Peacock (2008) that goat development projects have significant impact on farmers’ incomes and can raise their annual incomes from less that $100 to $1000. This 10-fold increase in income and asset value represents a significant step out of poverty for thousands of families benefiting from the dairy goat projects (Peacock 2008). The percentage contribution of dairy goats to household income observed in this study is higher than that reported by Panin and Mahabile (1997) who found that dairy goat enterprise contributed 15% to total household income. The contribution of dairy goat in Kongwa was found to be lower compared to that of Babati. This may be contributed by the low prices of live animals and milk in Kongwa district. It may also be due to the fact that the productivity of dairy goats in Kongwa district is low because of the extended drought period which makes feed availability to be poor, both in quantity and quality.

Comparison between dairy goat and non- dairy goat farmers in terms of income obtained from other enterprises

The main sources of income in the study areas were crop production, livestock keeping and small businesses. This study compared the production costs, revenue and gross margin of all enterprises undertaken by farmers with and without dairy goats (Table 4). Gross margin for crop production was higher for dairy goat farmers than for non-dairy goat farmers in Babati district. The same trend was observed in Kongwa district. Similarly, for livestock enterprises other than dairy goats and off-farm activities the gross margins for dairy goat farmers were higher than those of non-dairy goat farmers in both districts. The difference might be attributed to the use of income from dairy goats in preparation of crop farms and purchase of farm inputs. This indicates that dairy goats contribute to household income by supporting other enterprises. Manure from the dairy goats cause substantial improvement in soil quality, increase crop yield, hence, improve food security and income to household (Peacock 2005; Safari et al 2008; Lwelamira et al 2010).

Table 3: Annual variable costs, revenues and gross margins (TZs)  of dairy goat enterprises in Babati and Kongwa districts






Variable costs




















Breeding buck





Repair of goat house





Veterinary service





Total (x)










Sale of young Males





Sale of young females





Sale of adult Males





Sale of adult Females





Sale of Milk





Consumed  milk





Total (y)





Gross margin (y-x)





Table 4: Gross margins (TZs) and contribution of dairy goat production, crop production, livestock production and petty business to household income


Babati District

Kongwa District


Profit for dairy goat farmers

 Profit for non-dairy goat farmers

Profit for dairy goat farmers

 Profit for non-dairy goat farmers


988,496 (44.9%)

444,580 (58.2%)

628,225 (50%)

560,261 (68.5%)

Other livestock

384,692 (18%)

190,950 (25%)


151,008 (18.5%)

Total income

2,203, 854.25




Note: Numbers in brackets are percentage contributions to total income

Uses of income from dairy goat enterprise

The money obtained from the dairy goat enterprises through sales of milk and live animals was used to pay school fees by most households in Babati and Kongwa (28.6%) districts. This concurs with Kosgey et al (2008) who found that 32% of the income from dairy goats is spent on school fees. The values observed in this study are higher compared to those observed by Ogola et al (2010) who reported 16.7% of income being spent on school fees. However, the observation in this study is in agreement with Shirima (2005) who reported that more children are sent to school due to extra income from dairy goat enterprise. Furthermore, the findings by Nordhagen (2003) indicated that introduction of dairy goats in Tanzania has contributed significantly to the education of children.

The percentage of income used for medical bills in this study is in the range obtained by Kosgey et al (2008) in Kenya. Other uses of income from dairy goats were purchase of consumer goods, house construction, furnishing living houses and purchase of food during crop failure. Moreover, other uses included improvement of nutrition of the family, restocking and maintenance of goat house in both districts. Some farmers reported that they use the income from dairy goat enterprise for preparation of their crop farms. These observations demonstrate the important role played by dairy goat enterprises in improving crop productivity and, hence, improved household food security and welfare. According to Gihad and El-Bedawy (2000) keeping dairy goats lowers financial risks and overcomes periods of cash shortage. Many farmers who keep dairy goats have been able to invest in their farms, for example by buying land, and some have invested in small businesses in rural centres (Laker and Omore 2004).

Table 5: Uses of income from dairy goats enterprise

Use of income

Babati (%)

Kongwa (%)

Buying food



Paying medical bills



Paying school fees



Human house construction and repair



Buying land



Buying consumer goods



Paying for crop farming activities



Increase flock size



Goat house repair





This study was financed by the Regional Universities Forum for Capacity Building in Agriculture (RUFORUM) for which the authors are grateful. We would like to thank the farmers who participated and provided the information used in our study.


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Received 2 October 2013; Accepted 7 January 2014; Published 4 February 2014

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