ANALYSIS OF COMMON BEAN (Phaseolus vulgaris L) CROSS-BORDER TRADE AND MARKET EFFICIENCY IN EAST AFRICA: A CASE STUDY OF KENYA

ABSTRACT 
East Africa region has imbalances in the supply and demand of common bean. This can be offset by improving marketing infrastructure. The objectives of the study were to determine the characteristics of common bean traders, to determine the constraints to the observed trade in common bean varieties and finally to assess the extent to which markets have integrated in key selected markets. Multi-stage sampling technique was used to obtain a sample of 240 respondents (120 traders from the border points and 120 traders from key selected markets). The four border points (Busia, Malaba, Isebania, and Namanga) were purposively selected due to the extent of activities, nature of trade and the volumes of common beans that they handled. The three key markets (Nairobi, Mombasa, and Nakuru) were also purposively selected because of high potential demand and supply for common beans. Snow balling method was used to select the traders. Descriptive statistics were used to address characteristics of common bean traders in key selected border points and markets (objective 1) and constraints to the observed trade in the selected border points and markets (objective 2) and co-integration analysis was used to address the extent to which markets of common bean are integrated in key selected markets (objective 3). The findings revealed that a greater proportion of the traders were women, majority being retailers. The women traders also had more years of experience on average in the retail business compared to the men. Results also indicated that the major constraints to bean trade were high transportation costs, heavy rains, and irregularities in bean supply. Nyayo and Wairimu bean varieties were the most traded varieties in the markets whereas Saitoti variety was the least traded. The co-integration tests established that Nairobi- Mombasa and Nakuru- Mombasa Rosecoco markets and Nairobi- Nakuru and Nakuru- Mombasa Mwitemania markets were co- integrated. The study recommends that, in order to increase the degree of market integration, the government and private sector should improve marketing infrastructure especially the roads to enable easy flow of the product between the markets. There is also need to zero rate agricultural produce being imported in the country to tackle the issue of bribery at the border points, this in return will enable traders not take advantage of increased production to lower returns accruing to farmers thus enhancing degree of market integration.

CHAPTER ONE 
INTRODUCTION 
Background information 
The global economy is integrating rapidly through trade such that exports from developing countries are becoming increasingly diversified. In turn, these countries have become less dependent on agricultural exports than they were in the past. Currently, developing countries are becoming their own best markets for agricultural products. This is as a result of countries trading with each other. In order to facilitate trade in Africa, it’s important to remove bottlenecks that hinder cross border trade such as; bribery, long custom procedures, and complex import/export requirements. The Common Market for Southern and Eastern Africa (COMESA) and the East African Community (EAC) are some of the regional bodies that facilitate trade. These trading blocs harmonize and standardize trade procedures as well as the administration of border controls. For example, the major role of the EAC Customs Union is to deepen the integration process through liberalization and promotion of regional commercial integration through intra- regional trade (EABC, 2008). 

Trade in East Africa involves all types of goods such as agricultural commodities and manufactured goods. Agricultural commodities flowing across the borders include staple food commodities such as maize, beans, rice, fish, groundnuts and banana. Manufactured consumer goods traded are shoes, textile, medicine, vehicles and bicycle parts (Uganda Bureau of Statistics, 2007). It is estimated that 26% of Kenya’s exports to the EAC are evenly distributed in Uganda, Tanzania and Rwanda. On the other hand, Kenya is a significant destination for Tanzania’s exports estimated at 44% while Uganda’s exports to Tanzania are approximately 25% (EABC, 2008). Of the agricultural goods traded in East Africa, common bean is the major staple food that is traded across the borders (RATIN, 2011). In recent years, trade opportunities in common bean for both exports within the Eastern and Southern Africa region have increased. Kenya and Malawi show a huge potential for import market of common beans which can be tapped by their neighbors, particularly Tanzania, Uganda and the great lakes region (Katungi et al., 2009). Some of the bean corridors according to Pan-Africa Bean Research Alliance (PABRA) are around North West Tanzania, Burundi, Rwanda and Eastern DRC into Kenya ; South west Uganda, Northern Rwanda and Eastern DRC into Kenya; Northern Tanzania into Kenya and Ethiopia including the rift valley destined to Kenya. 

Common bean (Phaseolus vulgaris L) production in the world Common bean is globally grown in nearly 28 million hectares with a production of 20 million tons. The average yield of common bean (Phaseolus vulgaris L) has been increasing over the past years with a range of 493kg/ha in 1961 to 729kg/ha in 2008 (FAOSTAT, 2008). Production of common bean is highest in Latin America with about 5.5 million metric tons being produced with the major producers being Brazil and Mexico. Africa is the second largest producer of common bean with a production of 2.5 million metric tons. In Africa, the leading producers are Uganda, Kenya, Tanzania, Rwanda, Burundi, Ethiopia, Malawi and Congo (CGIAR, 2012). Most of the common bean varieties grown for the market are the sugar type, red mottled, large red kidneys, small and medium reds, yellows, tan/khaki (pinto), cream, white, purples and blacks. Common bean is grown twice a year in Eastern Africa. The sowing seasons run from March to April and from September to October with the exception of Ethiopia in which the main growing season is June to August (Rukandema et al., 1981; Wortmann et al., 1998; Ferris and Kaganzi, 2008).

Common bean production varies from country to country in East Africa due to varied soil type, climatic conditions and adoption of high yielding bean varieties by farmers. As shown in Table 1, the production of common bean in Kenya has been increasing over the past years. Uganda's common bean production has been steady with a slight drop in the year 2012 while in Tanzania there has been a fluctuation in the four years with the highest production being in 2012. This is due to increased acreage in Kenya, Uganda and Tanzania thus increase in productivity. 

Common bean consumption in East Africa 
Common bean provides dietary protein for over 100 million people in both the rural and poor urban areas. Studies have shown that there is a high per capita consumption of common bean in developing countries (13-40 kg per year) especially with low income families in urban and rural areas (Singh, 1999). The per capita consumption of common bean is high in poor countries such as Nicaragua (22.5 kg per capita per year) and in poorer regions of higher income countries such as Northeast Brazil (18.5 kilogram per capita per year) (CIAT, 2012). Eastern Africa has the highest per capita consumption in the world that ranges from 50 to 60kg (ISAR, 2011). The per capita consumption of common bean in Kenya is estimated at 14 kg per year (Spilsbury et al., 2004; Buruchara, 2007). Consumption of common bean in Karagwe district in Tanzania is higher than the national average and is estimated at 13 Kg per year (Xavery et al., 2005). In Uganda the per capita consumption of common bean is over 58 kg (Soniia, 1999). 

Apart from the pulse being an important food source, common bean has the potential to generate incomes if key markets are harnessed through contracts from other countries for the overall development of the economies. In addition, production of common bean contributes to the inputs, transport, processing, retailing, packaging and the formal and informal trade sector. However, the importance of regional trade of bean appears underestimated with focus on consumption and export markets. The improved bean varieties are not well known among most smallholder farmers in Kenya thus the need to promote these varieties. This is because the varieties developed in the 1980s that are low yielding and susceptible to diseases have been passed from farmer to farmer and saved from season to season. According to the Ministry of Agriculture Kenya (2009), the consumption of beans between 2004 and 2008 was approximately 464, 000 metric tons while the production was 357, 000 metric tons which resulted in a deficit of 107, 000 metric tons. 

Over the last few years in Kenya, the price per ton of common bean has considerably increased, from USD 760 in 2010, to USD 837.5 in 2011 then USD 866.1 in 2012 (FAOSTAT, 2013). This price change significantly affects the purchasing power of poor people in both rural and urban areas and also points to possible inefficiencies in grain distribution system between surplus and deficit areas. According to Kibiego et al. (2003), common bean deficit in Kenya suggests an apparent market failure to stimulate production. The deficit is caused by seasonal price fluctuation and lack of statistical data on bean marketing. To ensure production of different common bean varieties in the market at affordable prices, quantity and quality, an efficient marketing system is required. 

Statement of the problem 
East African region produces most of the common bean in Africa and Kenya is a major consumer of the bean. Despite increased regional trade and increased common bean production in Kenya over the past years, demand still outweighs supply and consequently prices have increased significantly. The constraints to common bean trade and effectiveness of the marketing systems are not yet clearly known. Past studies have looked into the issue of market information systems in the region with a view to strengthening it so as to correct supply and demand imbalances. However, integration of bean markets has received less attention therefore it is not known to which extent the border and major bean markets are integrated in the region to facilitate steady product flows across markets. This knowledge would help stabilize bean prices as well as increase its availability and consumption thereby contributing to food security and nutrition at household level. 

Objectives of the study 
General objective 
The broad objective of the study was to contribute to improved livelihoods of actors in common bean trade through efficient marketing of beans across the borders. 

Specific objectives 
1. To determine the characteristics of common bean traders in key selected border points and markets. 
2. To determine the constraints to the observed trade in the selected border points and markets. 
3. To assess the extent to which markets of common bean are integrated in key selected markets. 

Research questions 
1. What are the characteristics of common bean traders at key border points and markets? 
2. What are the constraints to the observed trade in common bean? 
3. What is the extent of market integration in key selected bean markets? 

Justification of the study 
One of the major policy needs in East Africa is to curb food insecurity and promote regional trade. To attain this, the East African Community should aim at facilitating agricultural trade among its members by eliminating some of the bottlenecks to cross border trade. This will become increasingly important in linking food surplus areas to food deficit areas especially as development is driven by increased population and activities in towns and cities. Thus, this study sought to generate valuable information on most traded bean varieties and market integration which can be used to develop the efficiency of trade in East Africa. Information on market flow of common bean enables improvement of policies to increase marketing efficiencies and also to maintain quality of varieties being developed by monitoring their movement across the borders. Farmers will be able to produce bean varieties that are highly demanded in the market. Traders will also benefit from the knowledge of the most traded varieties to trade in and which are the best markets to trade in to increase their profit margin. The government will be able to formulate policies to assist in promoting new drought tolerant and disease resistant bean varieties. 

Scope and limitation of the study 
This study focused on traders, transporters, crop inspectorate officials and customs officials at the border points of which the sampling unit was from the key selected border points and markets in Kenya. Reliance on memory recall of those traders and transporters who did not keep records affected precision of the data collected but the study supplemented the information through records kept by the customs officials at the border points. The study also utilized secondary data on the monthly average prices for three bean varieties (Mwitemania, Rosecoco and Mwezi moja) collected from the Ministry of Agriculture covering a period of three years (2011 to 2013) because prices for different varieties were incomplete in earlier years. 

Definition of terms 
Common bean: It is used in this study interchangeably with bean and scientifically known as Phaseolus vulgaris L. 

Food security: The state in which the food demands of people are met at all times. 

Cross border trade: The buying and selling of commodities with the seller being in one country and the buyer being in another country. 

Market performance: This study adopted the definition of market performance from Harris (1993) as representation of economic results of the structure and conduct, in particular the relationship between distributive margins and the costs of production and marketing services. 

Market efficiency: This study adopted the definition of market efficiency from Barrett and Li (2002) as the transfer of excess demand from one market to another, manifested in the physical flow of the commodity, the transmission of price shocks from one market to another or both. 

Market: Refers to a place where willing buyers and sellers exchange money for commodities. Market integration: This is the flow of commodities from surplus to deficit markets and transmission of price shocks from one market to another. 

Outline of the thesis 
This thesis is organized in five chapters. Chapter one gives the background of the research problem addressed in this study. Chapter two describes the literature reviewed, conceptual and theoretical frameworks. Chapter three describes the study area, sampling procedure and data collection strategies used. 

The results from this thesis are presented in chapter four whereby descriptive statistics results are presented and discussed on the characteristic of traders and constraints to bean trade. Chapter four analyzed market integration of Rosecoco, Mwitemania and Mwezi moja in the key selected markets using co-integration model. Summary, conclusion and implications are represented in chapter five.

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Item Type: Kenyan Project Material  |  Attribute: 56 pages  |  Chapters: 1-5
Format: MS Word  |  Price: KSh900  |  Delivery: Within 30Mins.
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