Who Wants to get Involved? Determinants of Sanya Juu Farmers' Willingness to Invest in a Dairy Processing Cooperative Plant.

Abstract

Smallholder dairy farmers in Tanzania continue to face low and unstable incomes due to the dominance of raw milk marketing, limited processing capacity, and weak bargaining power in the value chain. Establishing farmer-owned processing plants through cooperatives has been widely recognized as a pathway to value addition and improved market stability; however, farmer participation in capital-intensive cooperative investments remains low. This study examined the determinants of dairy farmers’ willingness to invest in a proposed cooperative-owned dairy processing plant in Sanya Juu District, Kilimanjaro, by assessing the role of cooperative values, demographic characteristics, and membership status. Guided by the Theory of Planned Behavior, the study adopted a mixed-methods approach involving a survey of 150 dairy farmers (89 cooperative members and 61 non-members) obtained through a multi-stage, stratified random sampling technique, and key informant interviews with cooperative leaders and livestock officers. Descriptive statistics, independent-samples t-tests, and binary logistic regression were used for quantitative analysis, while qualitative data were thematically analyzed to triangulate findings. Results indicate that 63.3% of farmers expressed willingness to invest, with non-members showing slightly higher willingness (67.2%) than members (60.7%). Cooperative value conviction emerged as a stronger predictor of investment intention than demographic factors. Principal Component Analysis (PCA) was employed to address high multicollinearity among cooperative values, yielding four uncorrelated components, of which two, solidarity and community cohesion (CV3) and transparency-related operational values (CV4) significantly increased the likelihood of investing. Age, sex, education, and membership status did not significantly predict investment. Qualitative insights reinforced that trust in cooperative leadership, perceived collective benefits, and social norms strongly influence investment decisions. The study concludes that investment willingness is fundamentally value-driven rather than demographic-driven. Strengthening cooperative governance, ensuring transparency, and reinforcing cooperative values are critical to mobilizing farmer investment in processing ventures. Future research should explore flexible financing models and comparative studies across regions.