When milk quality pays: Evidence from an incentive experiment in Uganda

By Bjorn Van Campenhout, Sarah Kariuki, Richard Ariong, Jordan Chamberlin, Benon Byarugaba, and Dennis AtuhaJanuary 9, 2026

In many agricultural markets, the limited ability to measure product quality at the source and trace it through the supply chain remains a key barrier to improvement, as the absence of reliable quality information blunts incentives for upstream actors to invest in better practices. This challenge spans a wide range of value chains, but it is especially pronounced in the dairy sector. Milk from smallholder farmers is typically pooled and transported through multiple intermediaries before reaching processors, making it difficult to observe and reward high-quality production at any stage. The difference in dairy is that lapses in quality do not only reduce efficiency for processors; they can also undermine consumer confidence in the safety of the final product, potentially dampening demand and limiting market growth.

As part of a continuing research project to study these constraints, IFPRI, CIMMYT, and partners deployed about 150 milk analyzers at strategic points in Uganda’s southwestern milk shed. These devices measure key compositional indicators such as butterfat, protein, and water adulteration. The project’s theory of change posits that making quality visible and traceable will alter behavior across the chain. Specifically, the central hypotheses are that:

• Milk collection centers (MCCs) begin screening milk more systematically to reduce the risk of processor rejection.
• Processors start differentiating on quality, potentially by offering price premiums for higher-quality milk.
• Farmers invest in quality-enhancing practices to avoid rejection at the collection center and to capture part of any quality-based price premiums that pass upstream.