ANALYSIS OF THE MARKETING BEHAVIOUR OF AFRICAN INDIGENOUS LEAFY VEGETABLES AMONG SMALLHOLDER FARMERS IN NYAMIRA COUNTY, KENYA

ABSTRACT
The African Indigenous Leafy Vegetables (AILV) agricultural sub-sector in Kenya has in recent times gained considerable prominence and attention. A diverse number of studies have underpinned the role it can play in improving the economic standing of smallholders, while playing an imperative nutritional role in the diets of many consumers. Stemming from increased awareness on the rise of various lifestyle illnesses and crusaders championing for healthy eating habits, the demand of AILV, as healthier dietary alternatives, has been gradually on the rise. However, the socioeconomic and institutional factors that influence market participation and the effect of choice of market packages on AILV income are still not clear. Therefore, the main objectives of the study were: to characterize the socio-economic attributes of AILV farmers; to determine factors influencing households’ market participation behaviour; and to identify the combination of market outlets that deliver the highest payoffs (income) to farmers. The study was based on data collected from a sample of 254 households drawn from Nyamira North Sub-County in Nyamira County. A multistage sampling procedure was used to arrive at the sample, with semi structured questionnaires employed as the research instrument to collect qualitative and quantitative data through face to face interviews. The determinants of market participation behaviour among smallholders was estimated by an ordered probit model, while the combination of market outlets that delivered the highest payoffs (income) to farmers employed a multinomial endogenous switching regression. SPSS and STATA software were used for data analysis and management. Findings revealed that marketing experience, land ownership, households’ food self- sufficiency, contractual marketing, access to credit and extension services significantly influenced the regimes in which smallholders participated in markets. Further, using market packages that contained urban market outlets led to higher incomes among smallholders. It is not enough that farmers merely participated in markets, rather they should participate in markets profitably as net sellers. Identifying the specific challenges and requirements that are unique for each market regime (net sellers, autarkic and net buyers) through proper targeting and screening of farmers is necessary. Here, equipping extension workers with the ability to address the specific needs of each group is recommended. Urban markets, in isolation as well as in market packages, were clearly shown to offer higher incomes in actual and counterfactual scenarios. Improving the condition of roads linking urban markets to producers could potentially reduce transportation costs of accessing such urban markets. This could go on to encourage the use of urban markets among farmers, who stand to gain better income and gradually fish themselves out of poverty traps.

CHAPTER ONE 
INTRODUCTION 
Background information 
About 30,000 edible plants are found throughout the world, 7,000 of which are grown or collected as food (Natarajan, 2002). According to Smith and Eyzaguirre (2007), about 3,000 species of these plants have been commercialized with only about 20 consumed on large scale. African Indigenous Leafy Vegetables (AILV) are increasingly recognized as possible contributors of both micronutrients and bioactive compounds to the diets of populations in Africa. The African continent is rich of vegetable species including amaranths which are among the most popular leafy vegetables within the continent (Maundu et al., 2009). 

The Sub Saharan Africa (SSA) region is a natural habitat to more than 45,000 species of AILV of which, about 1,000 can be eaten as green leafy or fruit vegetables that happen to be the mainstay of traditional diets (Mac-Calla, 1994). AILV subsequently play a significant role in the food security of the underprivileged in both urban and rural settings (Schippers, 2000; Onyango, 2002a). In Kenya, about 200 indigenous plant species are used as leafy vegetables (Maundu et al., 1999); of these 200, only a few have been fully domesticated, more are semi- domesticated and majorities are collected from the wild. A study by Maundu et al. (1999) reported that the most consumed traditional leafy vegetables in Kenya include the Amaranthus species (pig weed), Vigna unguiculata (cowpea leaves), Solanum nigrum (Black nightshade), Cleome gynandra (spider plant) and Cucurbita species (pumpkin leaves). 

Agriculture remains a key sector for the Kenyan economy. Its commercialization therefore necessitates improving participation of smallholders in markets, translating to improved smallholder incomes, their overall welfare, as well as their livelihoods. Hence, promoting smallholder commercialization through AILV production can be one avenue of such efforts. Here, the main argument for smallholder commercialization through AILV production is that it can allow households to increase their income directly (Okello et al., 2012). 

According to the 2010-2012 Kenya Horticultural Crop Performance (KHCP) report compiled by the Horticultural Crops Development Authority (HCDA) and the United States Agency for International Development (USAID) for the Ministry of Agriculture (MoA), the preference and hence demand for AILV has been steadily on the rise due to increased awareness, among the masses, on their health and nutritional benefits. The KHCP report labelled the share of AILV on the domestic value for vegetables as 5% in 2012, although the quantity produced was 11% of all the vegetables produced during the same year. 

Although large-scale growers dominate commercial horticulture in Kenya, the majority of horticultural growers (about 80%) are small-scale farmers. Virtually all rural households located in arable areas grow fruits and vegetables for home consumption and sale (Agricultural Development Fund, 2012). This is because horticulture has higher returns than most cash crops and is suitable for production on small and marginal farms in varying climatic conditions (Minot and Ngigi, 2003). Like most other agricultural subsectors, producing AILV lies majorly in the hands of smallholders thus providing tremendous opportunities for households to participate in AILV marketing and increase rural incomes. Maundu (2013) reported that demand has increased significantly since Kenyan supermarkets started stocking AILV like nightshade. With supermarkets like Uchumi shelving AILV in Kenya and Uganda, it was just a matter of time before Nakumatt and other major chains took it up, he adds. 

Socio-economic surveys in various parts of Africa, especially the SSA, have revealed that indigenous fruits and vegetables provide employment opportunities and generate income for the rural population (Abukutsa-Onyango, 2011). As much as consumers have become increasingly aware of the nutritional and medicinal value of AILV, hence rise in demand especially in major urban centres, the supply of these vegetables has however not matched growing demand. Most farmers are semi-commercially oriented poor farmers, are not organized, and lack inputs and skills to enable them to satisfy the dynamic market requirements (Ngugi and Nyoro, 2011). Further, introduction of exotic vegetables in mainstream agriculture have seen these vegetables only used during famine and by the poor. AILV are especially important to women who are involved in all aspects of the supply chain and dominate both intermediary and retail activities; thus providing them with an important income generating opportunity (Weinberger et al., 2011). The AILV market promises to keep growing, and with the rapidly expanding population of Kenya, a consequential increase in demand is projected to take place. 

Studies by Barrett (2009) and Kirsten (2010) alluded to market access as one of the critical factors influencing the performance of smallholder agriculture in developing countries. Access to new and better-paying markets for agricultural products is thus vital in enhancing and diversifying the livelihoods of poor subsistence or semi-subsistence farmers (Barrett, 2009). Such markets can be local (including village markets), catering for the local populations, regional markets that serve regional consumers in counties within the country or export markets. 

However, most smallholder farmers are engaged in subsistence and semi-subsistence agriculture with low productivity, low marketable surplus (hence low returns) and low investment, a situation described as low equilibrium poverty trap by Barrett and Swallow (2006). Enhancing returns from agricultural production through improved access to markets can therefore be a vital element of poverty alleviation strategies and livelihood improvement. Improved market access results in commercialization of agriculture, which can result in the production of marketable surplus and hence gains in income from agriculture meaning higher revenues, as well as savings translating to investment in productivity enhancing technologies. Making reference to Omamo (1998), Fafchamps and Hill (2005) and Shiferaw et al. (2009), despite the importance of market access in many developing country settings, it remains severely constrained by poor access to agricultural/market information. Poor access to market information results to information-related problems, such as moral hazard and adverse selection, which increase transaction costs, discouraging market participation by some farmers. In Nyamira County, African nightshade, spider plant and giant pig weed, in that order, are the best performing AILV. African nightshade is popular in Kisii and Nyamira counties with 53% of the 22,7991 metric tonnes (MT) marketed nationwide coming from the two counties. 

Nyamira County marketed 850.75 MT of leaf amaranth with a value of Ksh. 12.87 million. It was also the leading County in the production of the giant pig weed with 81% of Kenya’s total of 3,068 MT valued at Ksh. 201 million. The production of giant pig weed in Nyamira County stood at 2,500 MT with a marketed value of Ksh. 162.50 million. The figures for African nightshade stood at 5,781 MT valued at Ksh. 256.08 million; cowpeas at 1,732.26 MT valued at Ksh. 40.12 million; 88.50 MT of pumpkin leaves valued at Ksh 1.44 million; 4,526 MT of spider plant valued at Ksh. 200.51 million and pumpkin leaves stood at 88 MT worth 2.27 million. A quick summation of these figures reveals a market value of close to Ksh. 675.89 million highlighting the important contribution AILV play in the County and the potential they can have in poverty alleviation among poor households (USAID and HCDA, 2012). These figures are explicit that large volumes of AILV are marketed in the County depicting substantial market participation. 

According to Bellemare and Barrett (2006), agricultural households are both consumption and production units. This implies that they can be net buyers of given commodities, autarkic with respect to them or net sellers of them. However households’ behaviour and their extent towards market participation is not sufficiently captured in literature, with no recent studies attempting to capture market dynamics of households as either net buyers, autarkic or net sellers. A study by Jaleta and Gebremedhin (2011) stressed that, the extent in which the participation position in one market affects the other is not well explored in the literature. 

The answer to smallholders’ market participation by categories, as either autarkic, net sellers or buyers, traces its origins to Adam Smith and David Ricardo. Given a household’s desire for a diverse consumption bundle, it can either undertake production of all such goods and services for auto consumption, or it can specialize in production of goods in which it is relatively skilled and holds comparative advantage in production. Thus, it can consume some portion of the good it holds comparative advantage in and trade the surplus for other goods and services it desires but for which it holds no comparative advantage (Barrett, 2007). 

According to Bellemare and Barrett (2006), studies that have researched on market participation exist, yet the literature on the subject remains thin, especially in developing country settings where significant fractions make this question most salient. Different studies have researched on market participation decisions (Goetz, 1992; Key et al., 2000; Makhura 2001; Holloway et al., 2005; Bellemare and Barrett, 2006; Gebremedhin and Hoekstra, 2007; Barrett, 2006; Jaleta and Gardebroek (2008). However, according to Bellemare and Barrett (2006), the question of whether households make marketing decisions either sequentially or simultaneously is not explicit, in the sense that it raises two implicit questions: “First, does the household decide whether to be a net buyer, autarkic, or a net seller, and then decide how much to buy or sell only once it gets to the market and discovers additional market information, conditional on having chosen not to be autarkic?; or second, does the household head make both decisions before leaving for the market?” 

A study by Renkow et al. (2004) agreed that literature on smallholder market participation fail to capture the net position of smallholders in these markets arguing that households could participate in a given market both as a seller and buyer of a specific commodity at different times in the same production year. The decision to participate in markets or remain autarkic has been postulated to be household-specific rather than commodity-specific (De Janvry et al., 1991). Thus, separating the households’ decision into a discrete component (whether to participate in markets) and a continuous component (how much to sell or buy, or marketed surplus) for two types of market actors (buyers and sellers) provides further understanding of the underlying factors that govern these processes (Goetz, 1992). 

Statement of the problem 
Farmers in Nyamira have ventured into production of AILV due to the high market value associated with it. This is attributable to growing consumer awareness of their nutritional and health benefits. Though farmers engage in the markets, it is unclear why their overall participation as net sellers remains low. It also remains unknown why farmers operating under homogenous conditions, exhibit different market behaviours. Besides empirical literature on market channel choices being thin, little is known on the determinants and effects of using different market outlets in combinations, as opposed to individual channels. This study therefore aimed to fill the existing knowledge gap by giving empirical evidence on the determinants of market participation behaviour and outlet choices among smallholders. 

Objectives of the study 
The general objective of this study was to evaluate the marketing behaviour of AILV among smallholder farmers in Nyamira County, Kenya. 

The specific objectives of the study were to: 
1. Characterize the socioeconomic and institutional attributes of smallholder AILV farmers. 
2. Determine the socioeconomic and institutional factors influencing the marketing behaviour of AILV among smallholder farmers. 
3. Determine the combination of market outlets that deliver the highest payoffs to smallholder AILV farmers. 

Research questions 
1. What are the socioeconomic and institutional attributes of smallholder AILV farmers? 
2. What are the socioeconomic and institutional factors influencing the marketing behaviour of AILV among smallholder farmers? 
3. What combination of market outlets deliver the highest payoffs to farmers? 

Justification of the study 
Smallholder farming is ineludibly potent in various ways, in different countries and for different types of economic activities (Quan, 2011). AILV have both subsistence and commercial value (income generation) for the smallholder poor, without requiring huge capital investments (DFID and R4D, 2010). Therefore, encouraging smallholder farmers to participate in the marketing of AILV to meet available potential and opportunities, by creating conducive market environment for their produce, can be considered as one possible avenue of improving the welfare and livelihoods of smallholder households. This is possible if studies like this support policy interventions by identifying factors influencing farmers’ participation decisions in marketing of AILV. Existing demand patterns can also be identified which farmers can take advantage of and profit from. As well as enriching literature on market participation, this study can also serve as an input for policy makers and researchers who wish to work in this area. 

Scope and limitations of the study 
The study was confined to Nyamira County with the scope covering smallholder AILV farmers. The study was conducted in the months of April and May, 2015. Included variables on socio-economic, institutional and marketing factors were only selected variables and do not necessarily mean that all variables were captured. The market participation decisions in AILV were assumed to be separable in terms of autarchies, net sellers and net buyers’ positions. The study did not however seek to determine the extent of market participation amongst smallholders in terms of net sales and net purchases. 

Operational definition of terms 
A priori: Not supported by a factual study. Proceeds from theoretical deduction rather than from empirical observation or experience. 

Autarky: Economic independence or self-sufficiency. Here a household is not affected by outside influences and relies entirely on its resources. For this study, self-sufficient households are those who sell the same amount of AILV as they buy on the markets, either in terms of weight or value. 

Ex-ante: Before an event (before-hand). Based on anticipated changes or activity in an economy. In models where there is uncertainty resolved during the course of events, the ex- ante values are those that are calculated in advance of the resolution of uncertainty. 

Market Packages: Combinations of market outlets. 

Net seller: A household which is a net-seller of AILV sells more of it on the market either in weight or in value (quantity times price), than what they buy on the market for a given season or a year. 

Net buyer: A household that is a net-buyer of AILV buys more of it (either in weight or value) on the market than they sell for a given season or a year.

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Item Type: Kenyan Project Material  |  Attribute: 74 pages  |  Chapters: 1-5
Format: MS Word  |  Price: KSh900  |  Delivery: Within 30Mins.
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