Firm Size Distribution and Performance of Maize and Fertilizer Traders After Market Liberalisation: Evidence from Kenya

Improvement in the performance of agricultural markets was the ultimate goal of market liberalisation. In this paper, firm (trader) size distribution as a factor influencing market performance is analyzed using maize and fertilizer traders from Kenya. Firm size distribution was assessed by analyzing the normality of the distribution on volume traded. Performance was assessed by the level of competition (using Hirschman-Herfindahl index), marketing margins and marketing costs. Results show that firm size distribution for both commodities is log-normally distributed but positively skewed indicating a tendency towards smaller than larger firms. A plausible explanation is that faced with inadequate financial resources and inadequate business experience, new entrants opt to start small. These younger traders relative to time of market liberalisation still trade in small quantities compared to preliberalisation entrants, possibly implying difficulties still faced in firm expansion. The Hirschman-Herfindahl index of 0.11 for fertilizer traders and 0.20 for maize traders shows that there is fair competition among traders, implying increased market performance. This is further supported by low marketing margins and low marketing costs for marketing maize and fertilizer, as envisaged by proponents of market liberalisation. Both marketing margins and costs decrease with increasing trader size signifying economies of scale enjoyed by large traders. Place of purchase, pack size and distance from fertilizer-purchasing centres explain the observed spatial fertilizer prices.liberalisation, firm size distribution, costs, margins, Agribusiness, International Relations/Trade, D4, L1, Q12, Q13, Q18,

Fertilizer Trade under Market Liberalization: Preliminary Evidence from Kenya

This paper reports results of a countrywide survey of fertilizer traders undertaken in late September 1997 with the aim of identifying broad supply-side and demand-side factors influencing trade in inorganic fertilizers in Kenya. The next two sections describe the sampling and econometric procedures followed. Regression results are then reported. Implications of the results for policy and research round-out the analysis.International Relations/Trade,

Economics of Insecticide use and Potential for Bt Maize Varieties in the Control of Stalkborer in Kenya.

Maize is the staple food crop and source of income for majority of the Kenyan population and many sub-Saharan African countries. The increasing Kenyan population demands an increase in maize production if intermittent food deficits have to be averted. Since the introduction of improved maize varieties in mid-1960, the start of Green Revolution period, maize yields increased drastically up to 1970s and started declining from 1980s to-date. The key contributory factors are nutrient mining, sub-optimal input use and insect pest damage. Of the insect pests, stalk borer is of economic importance. Currently, KARI and CIMMYT are developing maize varieties that are tolerant to stalk borer damage. In order to evaluate the potential impact of these interventions economics of stalk borer control at farm level was evaluated. Surveys complemented with on-farm trials were executed in six major maize growing zones of Kenya. Farmers were randomly selected and a sample-frame established after which a total of 1854 households were randomly selected using random sampling technique. Each household was interviewed using structured questionnaire. Data on method of stalk borer control and the type insecticides used was collected. Partial budget and economic surplus models were used. The results indicated that very few farmers control stalk borer in maize despite significant stalk borer losses of about 15%. Therefore if Bt maize is introduced in Kenya it is likely to reduce these losses. This will benefit many hungry and poor Kenyans with improved household food supply and on farm incomes, in line with Government policy of food security and poverty eradication.Crop Production/Industries,

Firm Size Distribution and Performance of Maize and Fertilizer Traders After Market Liberalisation: Evidence from Kenya

Improvement in the performance of agricultural markets was the ultimate goal of market liberalisation. In this paper, firm (trader) size distribution as a factor influencing market performance is analyzed using maize and fertilizer traders from Kenya. Firm size distribution was assessed by analyzing the normality of the distribution on volume traded. Performance was assessed by the level of competition (using Hirschman-Herfindahl index), marketing margins and marketing costs. Results show that firm size distribution for both commodities is log-normally distributed but positively skewed indicating a tendency towards smaller than larger firms. A plausible explanation is that faced with inadequate financial resources and inadequate business experience, new entrants opt to start small. These younger traders relative to time of market liberalisation still trade in small quantities compared to preliberalisation entrants, possibly implying difficulties still faced in firm expansion. The Hirschman-Herfindahl index of 0.11 for fertilizer traders and 0.20 for maize traders shows that there is fair competition among traders, implying increased market performance. This is further supported by low marketing margins and low marketing costs for marketing maize and fertilizer, as envisaged by proponents of market liberalisation. Both marketing margins and costs decrease with increasing trader size signifying economies of scale enjoyed by large traders. Place of purchase, pack size and distance from fertilizer-purchasing centres explain the observed spatial fertilizer prices

Fertilizer Trade under Market Liberalization: Preliminary Evidence from Kenya

This paper reports results of a countrywide survey of fertilizer traders undertaken in late September 1997 with the aim of identifying broad supply-side and demand-side factors influencing trade in inorganic fertilizers in Kenya. The next two sections describe the sampling and econometric procedures followed. Regression results are then reported. Implications of the results for policy and research round-out the analysis

The Impact of Certification on Smallholder Coffee Farmers in Kenya: The case of ‘UTZ’ certification program

Increased awareness among coffee consumers of the impact of their consumption habits on the people and environment in coffee producing countries has resulted to implementation of certification programs in the coffee sector as an assurance of good practices in production and marketing of coffee. The UTZ certificate was the first to be introduced in the Kenyan coffee industry and this study provides the first quantitative assessment of its impact on smallholder farmers. The propensity score matching technique was used because it solves the ‘selection bias’ problem in assessment of the impact of development programs. The impact of the certification program differed between the two regions where it is being implemented probably due to the differences in bio-economic characteristics. Overall, the impact of the program ranges from higher coffee prices and coffee incomes, increased access to greater amounts of credit for agricultural purposes, increased incomes from other crop enterprises or off-farm activities, greater savings by households and increased investments on land. UTZ certification also resulted to better service provision by the cooperative societies. The perception by certified households that their economic situation has not changed may be attributed to the short period that the certification program has been in existence and also to the reference period (2008) which was a difficult year in Kenya due to the post election and economic crises

Economics of Insecticide use and Potential for Bt Maize Varieties in the Control of Stalkborer in Kenya.

Maize is the staple food crop and source of income for majority of the Kenyan population and many sub-Saharan African countries. The increasing Kenyan population demands an increase in maize production if intermittent food deficits have to be averted. Since the introduction of improved maize varieties in mid-1960, the start of Green Revolution period, maize yields increased drastically up to 1970s and started declining from 1980s to-date. The key contributory factors are nutrient mining, sub-optimal input use and insect pest damage. Of the insect pests, stalk borer is of economic importance. Currently, KARI and CIMMYT are developing maize varieties that are tolerant to stalk borer damage. In order to evaluate the potential impact of these interventions economics of stalk borer control at farm level was evaluated. Surveys complemented with on-farm trials were executed in six major maize growing zones of Kenya. Farmers were randomly selected and a sample-frame established after which a total of 1854 households were randomly selected using random sampling technique. Each household was interviewed using structured questionnaire. Data on method of stalk borer control and the type insecticides used was collected. Partial budget and economic surplus models were used. The results indicated that very few farmers control stalk borer in maize despite significant stalk borer losses of about 15%. Therefore if Bt maize is introduced in Kenya it is likely to reduce these losses. This will benefit many hungry and poor Kenyans with improved household food supply and on farm incomes, in line with Government policy of food security and poverty eradication