Rural institutions and producer organizations in imperfect markets: experiences from producer marketing groups in semi-arid eastern Kenya

"Many countries in sub-Saharan Africa have liberalized markets to improve efficiency and enhance market linkages for smallholder farmers. The expected positive response by the private sector in areas with limited market infrastructure has however been disappointing. The functioning of markets is constrained by high transaction costs and coordination problems along the production-to-consumption value chain. New kinds of institutional arrangements are needed to reduce these costs and fill the vacuum left when governments withdrew from markets in the era of structural adjustments. One of these institutional innovations has been the strengthening of producer organizations and formation of collective marketing groups as instruments to remedy pervasive market failures in rural economies. The analysis presented here with a case study from eastern Kenya has shown that while collective action – embodied in Producer Marketing Groups (PMGs) – is feasible and useful, external shocks and structural constraints that limit the volume of trade and access to capital and information require investments in complementary institutions and coordination mechanisms to exploit scale economies. The effectiveness of PMGs was determined by the level of collective action in the form of increased participatory decision making, member contributions and initial start-up capital. Failure to pay on delivery, resulting from lack of capital credit, is a major constraint that stifles PMG competitiveness relative to other buyers. These findings call for interventions that improve governance and participation; mechanisms for improving access to operating capital; and effective strategies for risk management and enhancing the business skills of the PMGs." Author's AbstractMarket imperfections, Transaction costs, Farmer organizations, Institutions, Collective action, Semi-arid tropics, Kenya, East Africa,

Determinants of the Speed of Adoption of Soil Fertility-Enhancing Technologies in Western Kenya

Most adoption studies have employed cross-sectional data in a static discrete choice modelling framework to analyze why some farmers adopt at a certain point in time. The static approach does not consider the dynamic environment in which the adoption decision is made and thus does not incorporate the speed of adoption and the effect of time-dependent elements in explaining adoption. The adoption speed of an innovation is important in various aspects. Based on data from a survey of a random sample of 331 smallholder households in western Kenya, this study investigated determinants of time to adoption of mineral fertilizer, animal manure and compost using Duration analysis. Results revealed that factors that influenced timing of the adoption varied by the practices. Whilst education level of the household head, cattle ownership, location of the farm, access to extension services, and participation in land management programmes accelerated the adoption of different practices, age of household head, relative farming experience and market liberalization retarded the adoption. Gender of household head gave mixed results. To speed up adoption of the practices requires policies that promote farmers’ participation in land management programs, access to extension services and markets in addition to stratified targeting of different practices to specific locations and farmers.Adoption, duration analysis, soil nutrients, Crop Production/Industries, Land Economics/Use,

Is Value Addition in Honey a Panacea for Poverty Reduction in the ASAL in Africa? Empirical Evidence from Baringo District, Kenya

Using survey data from 110 randomly selected honey producers from two divisions in Baringo this paper analyzes the constraints and drivers of value addition in honey, an economic activity with a potential to improve household livelihoods but whose development has remained rudimentary. Baringo District undergoes frequent and prolonged drought that impacts on household livelihood assets. The livelihoods have traditionally been agro-based but due to variations in climatic conditions, crop production has been very low. Livestock production has also been adversely affected by these trends, leaving honey production as a viable alternative for smallholder farmers since it is less dependent on, or affected by climatic variations and is not resource intensive. This study uses Heckman two stage and the logistic regression models to determine the extent of value addition contingent on the decision of a honey producer to participate in value addition activity, and to assess the link between honey value addition and household poverty status, respectively. The results show that the decision to add value is positively and significantly influenced by the amount of honey harvested, group membership and amount of hours spent on off-farm activities, while it is negatively influenced the age of the farmers and the education level of the household head. Value addition contributes to the reduction of poverty through the improvement of household incomes. This paper concludes measures need to be put in place that would encourage and facilitate the practice of value addition if the welfare of the poor rural population is to be improved.value addition, poverty reduction, drought, ASAL, Africa, Livestock Production/Industries,

Export Market Linkage via Gentleman's Agreement: Evidence from French Bean Marketing in Kenya

"Gentleman's agreements" involving handshakes or promissory market access possibilities through brokers and middlemen have enabled most small farmers in Kenya to export an extensive array of fruits and vegetables. However, despite rapid expansion into these forms of market linkages, there has been a dearth of empirical information regarding the factors that such marketers consider when linking small farmers to the market. This paper uses data from a 2001 French bean farmers survey conducted in Mwea Tebere Central Kenya to evaluate household and infrastructural factors determining informal linkages for French bean marketing. Logit estimates show that irrigation equipment is a prerequisite for linkage, farm localities further from central crop collection centres and close proximity of farms to source of irrigation waters, and poor accessibility of large farms preferred by brokers in linking small farmers. The results lend credence to the importance of brokers and middlemen as an emerging institution in linking small farmers to export markets in rural regions that have poor infrastructures e.g. roads.verbal agreement, logit, French beans exports, small farmers, linkage, brokers and middlemen, International Relations/Trade,

CATTLE AS ASSETS: ASSESSMENT OF NON-MARKET BENEFITS FROM CATTLE IN SMALLHOLDER KENYAN CROP-LIVESTOCK SYSTEMS

This paper uses data from a survey of two hundred and fifty cattle households in three cattle keeping systems; intensive, semi-intensive and extensive systems to estimate the value of non-market, socio-economic benefits of cattle in Kenya. These benefits of cattle keeping are of special importance in developing countries, where financial markets function poorly and opportunities for risk management through formal insurance generally absent. However, when estimating the total contribution of livestock, these non-market functions are often ignored since they are difficult to value, yet they may contribute to a better understanding of livestock production systems. The use of contingent valuation method is employed in this study to elicit these non-market values. Econometric estimations are then used to assess the factors influencing the non-market benefits function. The results indicate that these benefits are highly valued by cattle keepers and comprise approximately 20% of the animal's total value across the three systems. They are influenced by various production system and household related factors. Implications for policy are drawn.Livestock Production/Industries, QQ112, QQ118, DD223,

Determinants of Vulnerability to Expected Poverty among French Bean Farmers in Kenya

Poverty is increasing in rural areas of Kenya. The study examined factors influencing vulnerability of French beans farmers to expected poverty using Vulnerability to Expected Poverty approach on 492 randomly selected respondents. The study found a mean vulnerability to expected poverty of 19.6% which is below vulnerability threshold of 50% indicating that majority of French bean farmers irrespective of Global-GAP certification status were invulnerable to expected poverty. However, majority of those who were expenditure (56.3 percent) and income poor (92.2 percent) are vulnerable to future poverty. Factors influencing vulnerability to expected poverty are asset value (P=0.000), net crop income (P=0.000), off-farm income (P=0.000), household size (P=0.000), age of household head (p = 0.088), gender of household head (P=0.001) and distance to market (P=0.000). French beans farmers should practice farm diversification and expand acreage under Global-GAP certified French beans in order to increase income and expenditure and hence alleviate future poverty. Key words: French Beans, Vulnerability, Poverty, Global-Gap Standards DOI: 10.7176/JESD/10-10-14 Publication date:May 31st 201

Analysis of Factors Influencing Choice of Milk Marketing Channels among Dairy Value Chain Actors in Peri-urban Areas of Nakuru County, Kenya

In Nakuru County of Kenya, the urban population serves as a market for milk produced both within the outskirts and neighbouring counties. Increase in human population has led to high demand for milk and milk products, a phenomenon that has created opportunities for dairy value chain actors. Using a random sample of 200 farmers, this study investigated factors influencing urban dairy farmers’ choice milk marketing channels in Nakuru County. Data analysis using multinomial logit regression revealed that age, education, dairying experience, household size and frequency of milk purchases had significant influences on the type of channel chosen by the actors. To increase milk market participation and milk marketed volume, efforts should be made to strengthen the capacity of existing small and medium-scale farmers who showed a potential to enlarge their herds. It is also imperative for government and other development agencies to engage dairy value chain actors to minimize on their transaction cost for a smooth business to enhance food and nutrition security. The findings of the current study will be useful to dairy value chain actors in focusing on sustainable milk markets and dairy production in general. Key words: Marketing channels, Dairy, Value chai

The Influence of Social Capital on Natural Resource Management in Marginal Areas of Kenya

This paper analyzes the influence of social capital on the farmers' perception of the soil erosion problem and the level of investments in soil conservation in marginal areas of Kenya. It uses data from a survey of 321 households in Machakos and Taita-Taveta Districts. A Heckman's two-step model is applied to assess the influence of social capital on investments in soil conservation by farmers. Results show that the education level of the household head, slope of farmers' fields, proportion of off-farm income, and the status of soil erosion are significant determinants of the likelihood of farmers recognizing soil erosion as an important problem. Household size, slope, land tenure security, membership diversity, age of household head, farm size per capita and membership in groups influence investments in soil control measures such as terraces. The effects, however, are location-specific. The policy challenge is to establish and strengthen social capital elements that have a strong influence on communities undertaking soil conservation measures to promote sustainable agriculture, and improve land tenure security.Resource /Energy Economics and Policy,

Agriculture, Income Risks and Rural Poverty Dynamics: Strategies of Smallholder Producers in Kenya

Poverty in Kenya has been on the increase over the last decade. It is estimated that 56% of the total population live in absolute poverty. Most of the poor reside in rural areas where agriculture is the main livelihood activity. Majority of Kenya's farmers are smallholders. They account for 75% of the total agricultural output and about 70% of marketed agricultural produce. The fate of smallholder agriculture in this country is therefore central to poverty reduction. A collapse in output and incomes from smallholder agriculture is likely to have damaging welfare effects and retard pro-poor economic growth. Smallholders often operate in a risky environment, which affects the level and variability of household resource endowments and income. The importance of risk analysis in smallholder production systems arises from the fact that strategies to help farmers raise their productivity and income require an understanding of how risk affects their production decisions. Using cross-sectional input-output data from 240 randomly selected households from Vihiga and Kilifi districts covering the 2003/4 agricultural year, and time series data on yields, this study investigates how risk affects farmers' production choices in the crop-livestock systems. Further, it explores the possibility of improving production and income on these smallholder farms. Linear programming and MOTAD are used in analysis. Results indicate there is potential to improve production and income on these smallholder farms through a change in the enterprise mix. The farm plans are sensitive to risk, with trade-offs occurring between higher risk and returns.Smallholder farms, Income risk, Rural Poverty, Linear Programming, Kenya, Farm Management, C61, D13, L23, Q18,

Determining smallholder farmers’ preferences for Push-Pull technology dissemination pathways in western Kenya

The push-pull technology (PPT) has widely been disseminated to control stemborer (Chilo partellus and Busseola fusca) and Striga weeds (Striga hermonthica and Striga asiatica) in maize fields in Kenya. This study examined farmers’ preferences for various dissemination pathways in order to proffer better targeting of resources in an optimal dissemination strategy. The pathways considered were public meetings (barazas), radio, farmer field schools (FFS), field days (FD), farmer teachers (FT), the fellow farmers (FF) and print materials. Using a weighted score index and ordered probit regression, the different pathways were sequentially ranked as FD, FT, FFS, FF, print materials, Radio, and barazas. Marginal effects from ordered probit showed that farmers had the least preferences for baraza and radio pathways. The farmer categories with the highest preference for particular pathways were: less educated farmers for FD, farmers with small land sizes for FT, farmers belonging to groups for FFS, and young educated farmers for the print materials. This information is extremely important for targeting the different segments of farmers.Push-pull technology, Stemborer, Striga, Dissemination pathways, preference, Research and Development/Tech Change/Emerging Technologies,