Market liberalization created a situation where there are no guaranteed grain prices, no central information source and the need for marketing information increased. Unfortunately, most farmers have little or no access to marketing information. This study evaluates farmers’ perceptions of importance of marketing information; identifies farmers’ sources of grain marketing information; determine farmers’ confidence in and use of marketing information; and assesses determinants farmers’ willingness (WTP) to pay for marketing information. Data used in this study were generated using a structured questionnaire in a survey that covered a random sample of 120 households in traditionally grain surplus-and deficit zones of Kenya. The data were analyzed by descriptive statistics and logit model. Results show that 68% and 55% of the households in grain surplus and deficit zones, respectively, recognized that marketing information was very important. Farmers received marketing information from multiple sources, mainly from traders and other farmers. Most of the farmers who received the information were not utilizing the information due to perceived unreliability of the information and poor access to complementary infrastructure. Education level of the household was the most significant factor that positively affected farmers’ WTP for marketing information. In view of farmers’ perception that information provided by the private sources is unreliable, the public sector ought to provide marketing information as a public service. Smallholder farmers should be catalyzed to form strong associations so as to enjoy economies of scale in accessing marketing information and markets.Farmer, Grains, Logit, Markets., Agricultural and Food Policy, Consumer/Household Economics, Demand and Price Analysis, Environmental Economics and Policy, Farm Management, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, International Relations/Trade, Marketing, Productivity Analysis, Research and Development/Tech Change/Emerging Technologies,

De Groote, Hugo

Odendo, Martins

English

Research Papers in Economics

AAAE Conference Proceedings (2007) 85-90 
 
Linking Farmers to Markets: The Case of Grain Marketing Information in Western Kenya 
Odendo, M
1. and De Groote,  H
2 
1Kenya Agricultural Research Institute (KARI), P. O. Box 169, Kakamega, Kenya 
2International Maize and Wheat Improvement Center (CIMMYT), P. O. Box 25171, Nairobi, Kenya 
Abstract: 
Market liberalization created a situation where there are no guaranteed grain prices, no central information source 
and the need for marketing information increased. Unfortunately, most farmers have little or no access to marketing 
information. This study evaluates farmers’ perceptions of importance of marketing information; identifies farmers’ 
sources of grain marketing information; determine farmers’ confidence in and use of marketing information; and 
assesses determinants farmers’ willingness (WTP) to pay for marketing information. Data used in this study were 
generated using a structured questionnaire in a survey that covered a random sample of 120 households in 
traditionally grain surplus-and deficit zones of Kenya. The data were analyzed by descriptive statistics and logit 
model. Results show that 68% and 55% of the households in grain surplus and deficit zones, respectively, 
recognized that marketing information was very important. Farmers received marketing information from multiple 
sources, mainly from traders and other farmers. Most of the farmers who received the information were not utilizing 
the information due to perceived unreliability of the information and poor access to complementary infrastructure. 
Education level of the household was the most significant factor that positively affected farmers’ WTP for 
marketing information. In view of farmers’ perception that information provided by the private sources is unreliable, 
the public sector ought to provide marketing information as a public service. Smallholder farmers should be 
catalyzed to form strong associations so as to enjoy economies of scale in accessing marketing information and 
markets. 
Keywords: Farmer, Grains, Logit, Markets.  
 
Introduction 
Input and output marketing systems play key roles in 
adoption of agricultural technologies. If farmers do not 
have efficient input and output markets, they resist 
investing in new and more productive technologies 
(Oechmke et al. 1997). Lack of markets and poor 
marketing strategies are arguably the greatest 
challenges facing the agricultural sector in Kenya and 
the rest of Africa (Argwings-Kodhek, 1998; Robbins, 
2000). Therefore, anything that can be done to 
considerably reduce the cost and difficulties of linking 
producers to ultimate consumers such as providing 
storage facilities and supplying marketing information 
forms a central feature of any development in Africa 
(Robbins, 2000). Marketing information can help 
predict, strategize, plan and act expediently, rationally 
and efficiently (Mundy and Sultan, 2001), thus 
reducing business risk, transaction costs and enabling 
market participants to explore business opportunities 
(Robbins, 2000). However, information has no value 
to those who do not use it even if they receive it 
(Kotler and Armstrong, 2001).  
Prior to market liberalization policies in the early 
1990s, the Government of Kenya maintained extensive 
control over cereal marketing through the National 
Cereals and Produce Board (NCPB) as the sole buyer 
and seller of cereals. The Government set prices, 
which were more or less static in a particular season, 
making the prices predictable. The actors in the cereal 
sub-sector, therefore, needed little information, other 
than buying and selling arrangements laid down by the 
Government (KARI, 1996). Market liberalization 
created a situation where there are no guaranteed 
markets and no central information source (Argwings-
Kodhek, 1998).Without sufficient and transparent 
marketing information, liberalized market cannot work 
efficiently because the market cannot provide a level 
playing ground for buyers or sellers. Little is known 
about importance, sources, and utilization of 
marketing information amongst grain farmers in 
western Kenya following the market liberalization. It 
is against this background this study was conceived to: 
evaluate farmers’ perceptions of importance of 
marketing information; identify farmers’ sources of 
grain marketing information; determine farmers’ 
confidence in and use of marketing information; and Linking Farmers to Markets 
assess determinants farmers’ willingness (WTP) to pay 
for marketing information. 
Methodology 
The study areas 
The study was carried out between June and 
November 2004 in two contrasting zones: grain 
surplus-and deficit zones in Kenya. The grain surplus 
zone comprised Lugari and Trans Nzoia districts in the 
Kenyan highlands, whilst the traditionally grain deficit 
zone was composed of Kakamega and Vihiga districts 
in the moist mid-altitude zone around Lake Victoria. 
Kakamega and Vihiga Districts lie between latitude 0
o 
30’N and longitude 34
o 30’ E, whilst Trans Nzoia, the 
main source of maize that is consumed in the moist 
mid-altitude zone, lies within latitude1
o  N and 
longitude 35
o E.   
Data collection and analysis 
The survey districts were purposively chosen. A three-
stage sampling technique was used to select the study 
sites and households. In the first stage, sub-locations 
were sampled using lists of sub-locations in each 
district. In the second stage, villages were randomly 
selected using village lists compiled by key informants 
from the selected sub-locations. For the selected  
villages, lists of households in each village were 
obtained from the village elders and used as sampling 
frames the survey households. A sample of 120 
households (74 from grain surplus-and 46 in deficit 
zones) was selected for the study. Enumerators, who 
had earlier been trained on field survey techniques,  
collected the data from the households using a 
structured questionnaire. Descriptive statistics and 
logit econometric model were used to analyze the data. 
Following (Pindyck and Rubinfeld, 1981) the functional 
form of logit model was specified in equation 1:  
logPi/1-Pi=βo+βiXi+βkXk  ………………..Equation 1                 
Where:  1-P is Probability that household is WTP for 
marketing information 
   Pi/1-P is odds of WTP  
βo = constant 
βi= A vector of unknown parameters to be estimated. 
Xi = A vector of socio-economic variables pertaining to 
a household i, which are explanatory variables for the 
probability (Pi) that the i
th   household is WTP for 
marketing information. The variables that were 
considered to affect WTP (the dependent variable--
1=WTP; 0 otherwise) for marketing information and 
their expected signs are shown in Table 1. 
 
 
 
Table 1. Explanatory variables for logit model
Variable Description Expected  sign 
EXPI   Experience of household head in farming (years)  - 
INFARM  Proportion of on-farm income to total income (%)  + 
FAMSZ  Size of land owned (acres)  + 
DIST  Distance to the nearest market (km)  + 
SEX  Decision maker to grow maize; 1=male; 0 =otherwise  + 
OBMAIZ  Objective of maize; 1=mainly for sale; 2=both; 3= consumption   _ 
ZONE  Grain zone; 1=grain surplus; 0=otherwise  + 
AGE  Age of the household head (years)  +/- 
EDUC  Schooling of household head (years)  + 
86  AAAE Ghana Conference 2007 Odendo and De Groote 
Results and discussion  sources (Figure 1). Surprisingly, radio was a major 
source of marketing information for only 24% of the 
households, yet over 80% of the surveyed households 
owned radio. This is mainly attributed to lack of 
congruence between the time the information is 
broadcast and the time the farmers listen to the radio. 
The marketing information received was mainly on 
grain prices.  
Farmers’ perception of importance of marketing 
information 
Farmers’ perception of importance of marketing 
information is critical in determining whether to seek 
and use the information.  
Most farmers (74%) considered marketing information 
as very important, and 24% as somewhat important 
(Table 2). Going by zones, 89 % of the farmers in 
grain surplus zone and 55% in the deficit area 
recognized that market information is very important. 
Reliability of farmers’ sources of information 
Reliability or replicability of information received is 
an important attribute in usage of information. The 
only one farmer that obtained marketing information 
from telephone and other that obtained from field days 
perceived the two sources as highly reliable (Figure 2). 
Telephone was perceived to be a most reliable source 
because sharing of marketing information on phone 
was reportedly mainly between people who knew each 
other and had built trust over time.  
Sources of marketing information 
Farmers obtained marketing information from multiple 
sources. However, most respondents reported that 
traders (67%) and other farmers (66%) were the main  
 
Table 2. Farmers' perception of importance of market information (%) 
Degree of importance  Deficit n=46  Surplus n=74  Total =120 
Very important   54.5  88.7  74.2 
Somehow  important    39.4 14.3 23.6 
Not important  6.1  0  2.2 
 
 
 
 Figure 1. Major sources of marketing information for 
farmers in western Kenya
0
10
20
30
40
50
60
70
80
90
100
Traders
Farmers
Radio
Brokers
Extension visits
Newspaper
Transporters
NCPB
Others
Telephone
Field days
Information sources
P
e
r
c
e
n
t
 
f
a
r
m
e
r
s
Deficit
Surplus
 
 
 
 
 
 
 
 
 
 
 
 
 
Improved Markets for African Farmers  87  Linking Farmers to Markets 
Figure  3. Farmers' perceptions of reliability of 
information received from different sources
0
20
40
60
80
100
Telephone
Field days
NCPB
Others
Newspaper
Extension visits
Farmers
Brokers
Traders
Transporters
Radio
Information sources
P
e
r
c
e
n
t
 
f
a
r
m
e
r
s
High
Moderate
Low
 
 
Utilization of marketing information from different 
sources 
The farmers who obtained information from telephone, 
traders and newspapers reported extensive use of the 
information. On average, nearly half (49%) of the 
farmers reported that they extensively used the 
information they obtained. Information from other 
sources was either partially used or not used at all. The 
reported constraints to use of the received marketing 
information were unreliability of the information, lack 
of grain storage facilities, urgent family needs and 
high transport costs. High transport costs and lack of 
storage facilities were particularly important in the 
surplus zone where over 60% and above 50% of the 
respondents, respectively, cited the constraints. 
Emergencies and basic family needs do not allow 
farmers to store grains for some time after harvest. 
They sell the grains at low prices during harvest period 
even if they are aware that the prices would rise later. 
Factors affecting farmers’ willingness to pay for 
marketing information 
The model indicates that 88% of the total variations 
were explained by logistic model which is very good 
for cross section data used for this study. The Chi-
square shows the parameters included in the model 
were significantly different from zero at less than 1% 
probability level. 
The significant factor at 1% level that explained WTP  
for marketing information was education level of the 
household head (EDUC). However, at 5% level, 
distance from the market (DIST), sex of the decision-
maker on maize farming (SEX), and farmers’ 
objective in maize farming (OB_MAIZ) were 
significant. The proportion of farm income to the total 
income was barely significant at 10% level (Table 2).  
Education level of the household head positively 
affected WTP for marketing information. This finding 
is in line with a general agreement that exposure to 
education increases farmers’ capacity to obtain process 
and use the information (Feder, et. al.1985).  
The effect of sex of the decision-maker was negative 
as expected because households that are male-headed 
are likely have more ability to seek and pay for 
information as men generally have more resources, 
including time than women. Gender studies have 
provided ample evidence that despite women’s 
historical contribution to food production efforts in 
sub-Saharan Africa, women lacked equal access to 
factors of production and information on agricultural 
activities (Mutangadura, 2005). Indeed, men are more 
involved in marketing of maize hence have greater 
propensity to seek for marketing information. The 
expected sign on age is an empirical question. 
Distance to the market was positively associated with 
WTP, probably because people living near markets are 
keen to know information regarding prevailing market 
conditions. 
 
88  AAAE Ghana Conference 2007 Odendo and De Groote 
 
Conclusions and recommendations 
About three-quarter of the farmers in both grain 
surplus and deficit zones perceived marketing 
information to be very important. The farmers 
received marketing information from multiple sources, 
mainly from individuals--traders and fellow farmers. 
However, the farmers considered the information 
received from individuals, which mainly covered 
prices, as unreliable. About half of the farmers who 
obtained marketing information extensively used it. 
Education level of the household head was the most 
significant factor that positively affected farmers’ 
WTP for marketing information.  
To improve reliability of information so as to promote 
its usage, the public sector should provide the 
information as a public service and minimize bias 
inherent in individual information sources. This could 
be achieved by the Ministry of Agriculture negotiating 
with the public information media to provide 
marketing information as a public good. In addition, 
marketing information should be integrated in routine 
agricultural extension messages. As the value of 
information depends on its use, there is need to 
improve the complementary infrastructure including, 
storage, transport and credit facilities in order to 
improve the use of obtained information. Finally, 
farmers should be catalyzed to form strong marketing 
associations so as to enjoy economies of scale in 
accessing marketing information and related marketing 
services.  
Acknowledgments 
We thank CIMMYT-Nairobi, for financial support. 
Special thanks our colleagues at KARI- Kitale, KARI-
Kakamega and the staff of the Ministry of Agriculture 
for their help in data collection. Finally, many thanks to 
the farmers who accepted to be interviewed. 
References 
Argwings-Kodhek,  G.  1998. Monitoring for 
Agricultural Policy Making in Kenya Agricultural     
Monitoring and Policy Analysis Project. Nairobi: 
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Agricultural Sector and More so Agricultural 
Research. Proceedings of a National Workshop on 
Liberalization of Domestic market, held in 
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Table 3: Results of logit analysis 
Variables   Coefficient (B) S.E.  Wald  P-value 
EXP 0.056  0.041  1.829  0.176 
INFARM 0.018  0.01  3.158*  0.076 
FAMSIZ 0.003  0.01  0.11  0.74 
DIST -0.293  0.126  5.378**  0.02 
SEX -0.699  0.353  3.920** 0.048 
OMAIZ -0.962  0.4  5.788**  0.016 
ZONE -0.548  0.602  0.829  0.362 
AGE 0.117  0.141  0.688  0.407 
AGE
2 -0.001  0.001  0.88  0.348 
EDUC 0.304  0.105  8.397***  0.004 
Constant -1.679  3.311  0.257 0.612 
  -2 Log Likelihood      88.619   
  Model Chi-Square    25.793*  0.004 
  Correctly Predicted farmers not WTP     64.70% 
  Correctly predicted farmers WTP        82.40% 
  Overall cases correctly predicted    75.3% 
*, **, and *** indicate significant at 10%, 5% and 1% levels respectively 
Improved Markets for African Farmers  89  Linking Farmers to Markets 
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90  AAAE Ghana Conference 2007 

Monitoring for Agricultural Policy Making in Kenya Agricultural Monitoring and Policy Analysis Project.

of agricultural innovations in developing Countries: A survey. Economic Development and Cultural Change, 33:255-297.KARI (Kenya Agricultural Research Institute).

Linking Farmers to Markets: The Case of Grain Marketing Information in Western Kenya

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