INFLUENCE OF SOCIAL CAPITAL ON PRODUCER GROUPS’ PERFOMANCE AND MARKET ACCESS AMONGST SMALLHOLDER FRENCH BEAN FARMERS IN KIRINYAGA COUNTY

ABSTRACT
Market access is a major constraint facing agricultural commercialization in Kenya. The pressure on arable land and market changes are mainly felt by the smallholder farmers who are faced with high transaction costs such as information access and transport costs. In addition, these farmers face a number of institutional and technical factors putting their market survival at stake. To curb these challenges, formation of farmer groups and organizations has become important in bringing about collective action whose basis is social capital. However, this capital must be mobilized through group membership and other social dimensions to achieve collective action. The dimensions of the farmer organizations that constitute social capital and how they enhance market access are of great concern. This study therefore, sought to assess the role and influence of social capital on the performance (measured by commercialization) of producer groups amongst smallholder French bean farmers in enhancing market access and improved household incomes. The study was conducted in Mwea sub-county, Kirinyaga County and a multistage sampling method was used to obtain a sample of 174 farmers (95 group members and 79 non- group members) who were interviewed using structured questionnaires. Descriptive statistics was utilized in characterizing socio-economic attributes of the smallholder French beans farmers. Tobit model was used to determine influence of the social capital dimensions and institutional factors on groups’ performance while multiple regressions were used to assess the effect of group membership and social capital dimensions on household income. SPSS and STATA computer programs were used to process the data. The results showed that gender, age, education level, French beans yield, farming experience, transport cost, off-farm income, initial social capital, trust index and meeting attendance significantly influenced the extent of commercialization. Further, age, land size, land tenure, ownership of transport means, French beans yield, off-farm income, membership to other organizations, group heterogeneity and trust index significantly influenced household income. The results of this study enhanced a better understanding of social capital dimensions in farmer group performance. Understanding group marketing will help in interventions to increase income among the smallholder farmers.

CHAPTER ONE 
INTRODUCTION 
Background information 
Developing the agriculture sector remains an important factor in the achievement of sustainable food production and thus, the global food security. Although most economies in the sub-Saharan Africa have undergone considerable diversification, over the years, agriculture is still the largest economy. However, there are increased challenges of population pressure, land degradation and declining agricultural productivity, and thus farming in sub-Saharan Africa is increasingly knowledge intensive (Katungi et al., 2008). Furthermore, market access remains the main constraint facing smallholder commercialization of agriculture (Poulton et al., 2006), making them to produce mainly for subsistence. 

In Kenya, arable land holding have become smaller due to population pressure and land sub-divisions, hence farmers have transformed from staple crop production to highly market- oriented crops, especially horticulture. Horticulture is labour intensive and thus creates more employment opportunities leading to increased incomes (Mbithi, 2008; Wollni and Brümmer, 2012). For this potential to be realized the smallholder farmers need to operate in a level playing ground (Ondieki-Mwaura et al., 2013) in terms of access to inputs, markets and support services. The efforts towards improving and sustaining the sector's productivity and marketing remain crucial to the nation’s economic development and the welfare of the people. 

Horticultural crops are gaining popularity among smallholder farmers in Kenya. French bean (Phaseolus vulgaris) is among these crops adopted by farmers due to its income generating ability. Apart from international demand, there has been an increasing domestic demand especially in urban areas. French beans are the largest vegetable export in Kenya and are grown in most parts of the country which include Kiambu, Machakos, Nyandarua, Nakuru, and around Mt. Kenya region, that is, Meru, Embu, Nyeri and Kirinyaga Counties (Okado, 2000). The small- scale farmers have a longer history in the production of this crop. It is estimated that 70% of the vegetables exported are grown by smallholder farmers, with almost 50,000 being French beans farmers (Minot and Ngigi, 2004). In 2011, French beans accounted for 29 per cent (KES 4 billion1) of the total fresh vegetable export earnings in Kenya. 

Market access being a major constraint in commercialization of agriculture (Poulton et al., 2007; Wambugu et al., 2009); recent studies have identified strategies for overcoming high transaction costs faced by farmers. One of such strategies is collective action in the form of farmer groups. The success of a farmer organizations and collective action in reducing transaction costs depends on social capital (the level of cooperation or networking between its members) among other factors. Social capital is a set of formal values and norms shared among members of a group that permits them to cooperate with one another. Members of a group have an opportunity to exchange experiences, organize trainings and marketing campaigns for their produce. Therefore, smallholder farmers overcome market failures and maintain their market access through the formation of farmer or producer groups (Katungi et al., 2007) and the expectation is that farmers’ participation in these producer groups will influence their access to the market. 

Fafchamps (2004) highlights that market exchange in Africa is much more costly, cumbersome, time consuming, and unpredictable than elsewhere since the search costs are high because of the large number of participants. Social capital, through farmer groups help to bridge this gap by enhancing cooperation, coordination and collective action making market exchange easier. Since French beans farmers in Kirinyaga have formed marketing groups, this becomes true in their context. The social capital and networks among French bean farmers not only allow them to access the markets, but also acquire information on the disparities existing among several exporter or broker agents’ pricing. Membership to social networks generates social capital that members can rely on to access the market (Udry and Conley, 2006). However, farmers with poor social networks often face difficulties in collective action activities that influence the level of market access. 

Information exchange is an important dimension in social capital in influencing market accessibility. Early studies show that farmers, particularly those with little financial and social resources or political leverage, often face high costs of accessing information and knowledge (Kirsten et al., 2009). Apart from the information accessed through the mass media, farmers also get agricultural information from the social networks. For individuals to engage in gainful information exchange, a degree of interpersonal connections between them is required (Granovetter, 1973; Coleman, 2000). Each individual decides whether to exchange agricultural- related information with others, and if so, whether to provide or acquire information, or both (Katungi et al., 2008). Studies have shown that human beings often exchange information with individuals they trust. Trust is therefore an important component of social capital (Coleman, 1990; Halkos and Jones, 2012). In the case of French beans’ exporter-farmer relationship, an exporter tends to trust a contract entered with a group than an individual farmer (Ondieki- Mwaura et al., 2013). 

Earlier studies have found social capital to be having measurable effects on different human aspects (Putman, 1993). Portes (1998) observes that whereas economic capital is in people’s bank accounts and human capital is inside their heads, social capital inheres in the structure of their relationships. Narayan and Pritchett (1997) highlighted different social capital dimensions and aspects including group heterogeneity, membership density, labour contribution, meeting attendance and participation in group decision making. These indicators bind the members together. There is however, limited information about how the various binding interrelationships among the farmers affect groups’ performance and hence market accessibility locally, regionally and internationally. 

The effectiveness of the social capital dimensions depends on the enabling environment, which includes the relationships among individual farmers, between farmer groups and the market. Groups also face challenges like coordination of the members and their success in accessing the market relies heavily on the social capital, in which its benefits to farmers is little known. This study therefore sought to fill the knowledge gap in identifying the role that social capital play in influencing the participation in producer groups and their performance in enhancing market access among smallholder French beans farmers in Kirinyaga County. 

Statement of the problem 
With access to markets becoming a challenge to most smallholder farmers due to the technical and institutional factors, farmer based organizations are increasingly becoming popular in the Country. Group marketing has gained considerable success in French beans and most farmers in Kirinyaga County have shifted the marketing of their produce from individual to group marketing. The different farmer groups operate and become efficient as long as there is a bond holding the members together enhanced by social capital. This will facilitate coordination and cooperation of individuals and groups within a community to improve their market access ability and increased incomes. Though, there exist a good number of farmer groups in the county, little is documented on the influence of social capital dimensions on small-scale household participation in farmer groups and its contribution towards market access and improved incomes. 

Objectives of the study 
General objective 
To assess the role and influence of social capital on the performance of producer groups amongst smallholder French bean farmers in contributing to improved market access and increased incomes in Kirinyaga County, Kenya. 

Specific objectives 
a) To characterize the socio-economic attributes of the smallholder French bean farmers in Kirinyaga County. 
b) To determine influence of the social capital dimensions and institutional factors on groups’ performance. 
c) To assess the effect of group membership and social capital dimensions on household income. 

Research questions 
a) What are the socio-economic characteristics of farmer groups and individual French bean farmers? 
b) What are the social capital and institutional factors that influence smallholder farmer groups’ performance? 
c) What is the influence of group membership and social capital dimensions on household income? 

Justification of the study 
Since majority of smallholder farmers do not have easy access to high value markets because of high transaction costs, group marketing becomes an important strategy through the formation of farmer groups. Groups help in market access by increasing the bargaining power and access to knowledge and information. According to Kirsten (2010), market access has been identified as one of the critical factors influencing the performance and commercialization of smallholder agriculture in developing countries. The performance and success of farmer groups and collective action in reducing transaction costs is strengthened by social capital. It is therefore important to understand the influence of social capital dimensions and other factors on the performance of these groups. 

Social capital is an important, and so far largely, the missing dimension of income and poverty analysis (Narayan and Pritchett, 1997). It is therefore important to build social capital among the smallholder farmers since it creates collective action and enhances efficiency in accessing information, credit and better markets for the produce. The effectiveness of social capital in enhancing market access has received little recognition. Therefore, this study will give a better insight to enrich the stock of existing but limited in literatures regarding the role of social capital in influencing the participation and performance of farmer groups in enhancing accessibility of the market among smallholder horticultural farmers and can serves as an input for policy makers and researchers who wish to work in this area. 

Scope and limitations 
The study was confined to Mwea within Kirinyaga County. This was a case study involving only French beans farmers and producer groups. The study mainly focused on the social capital dimensions among the farmer group members and its implication on markets access and improving the incomes of the farmers. Social capital is however, a broad field and therefore not all issues will be explored. The results can only find limited applications to other French bean farmers especially those with similar socio-economic characteristics as Kirinyaga County. 

Definition of terms 
Collective action – is defined as a voluntary action taken by a group of individuals, who invest time and energy to pursue shared objectives. 

Horticulture – is the science or art of growing vegetables, flowers, and fruits. In this case French bean farming is an example of horticultural production. 

Institutional factors – are formal and informal rules that govern transaction activities between individual or among groups of people. 


Market factors – any external factors that affects the demand for or the price of a good or service. 

Market participation - refers to any market related activity which promotes the sale of produce (Key et al., 2000). 

Smallholder farmers – are French bean farmers who are characterized by land holding less than five acres 

Social capital – is defined for this study as the formal and informal linkages of rural inhabitants through local organizations/groups in rural areas. 

Social capital dimensions include: heterogeneity index, membership density, meeting attendance index, decision making index, and the level of trust index, adopted from Grootaert, (1999) 

Socio-economic factors- factors that influence both the social and economic wellbeing of an individual. Transaction cost – are observable and non-observable cost associated with enforcing and transferring property rights from one person to another (Eggertson, 1990).

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Item Type: Kenyan Project Material  |  Attribute: 69 pages  |  Chapters: 1-5
Format: MS Word  |  Price: KSh900  |  Delivery: Within 30Mins.
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