Abstract:Smallholder activity is the backbone of the agricultural sector and plays an important role in Kenya's economy. As the Republic of Kenya (R. oK.), donors and development agencies concert their efforts to grow the agricultural sector in Kenya, most of the interventions are designed to adopt the value chain approach and appreciate that the beginning of the value chain is an integral part of its success, the smallholders. There has been a deliberate focus by United States Agency for International Development (USAID), to develop the dairy value chain and the agency has designed an entrepreneurial value chain concept to improve the performance of smallholders. This study attempted to understand whether entrepreneurial value chain drivers, namely, access to incentives (finance), training and access to production resource had influenced the performance of smallholders within the dairy value chain .The USAID entrepreneurial value chain projects have a total of 70 smallholder dairy farmers who formed the sampling frame for this study. The researcher used purposive sampling to identify a sample size of 50 smallholder dairy farmers based in Eldoret. A semi-structured questionnaire was the main instrument used to collect primary data from a total of 49 out of 50 respondents; this is a 98% response rate. Data was analyzed using Statistical Package for Social Science (SPSS) version 20, to test the relationships in the conceptual framework. Data was presented in narratives and tables. The study established that training had to a greater extent improved the performance of smallholders; this was followed by access to incentives and then production resources. In respect to what aspects of their production increased, the smallholders indicated that a larger impact was reflected on improved quantity of milk followed by increased revenue, increased herd and lastly increased milk quality. The recommendations drawn from the study were in two categories, further research and best practice. Further research is recommend to establish whether the entrepreneurial value chain drivers have an impact on other value chain actors higher up the dairy chain. This finding would be used to identify which entrepreneurial drivers can be introduced across the chain and assist in developing a sustainable diary value chain. There is also need for further research to determine whether the entrepreneurial value chain would improve performance of smallholders in other agricultural value chains. As for best practice, the study revealed empirical evidence on the positive implication of entrepreneurial driving opportunities on smallholder performance, hence justification for a widespread adoption of entrepreneurial value chains as interventions that support smallholders especially within the dairy value chain.

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