EFFECT OF ICT USE ON PERFORMANCE OF AGRIENTERPRISES. A CASE OF SMALLHOLDER PINEAPPLE FARMERS IN KIAMBU COUNTY, KENYA

ABSTRACT
Recently, there has been emergence in the use of modern Information Communication Technologies (ICT) in the different operations of agrienterprises. This ranges from the provision of agricultural information to marketing of agricultural products through the use of ICT tools such as mobile phones, television and radio. Despite the potential of ICT tools to enhance efficiency in agrienterprises operations, little is known about the effect of ICT use on performance and farm income of small scale farmers in rural areas. The aim of this study, therefore, was to examine the effect of ICT use on performance of pineapple agrienterprises. Specifically, it sought to: characterize structure of ICT usage among the smallholder agrientrepreneurs; determine factors influencing use of ICT among smallholder agrientrepreneurs and determine effect of ICT use on income of smallholder agrientrepreneurs. The study was based on data collected from a sample of 183 households drawn from Gatundu North Sub-County in Kiambu County. Multistage sampling procedure was used to select the respondents and semi structured questionnaires employed to collect qualitative and quantitative data through face to face interviews. The determinants of ICT use was estimated by multivariate probit model while the effect of ICT use was estimated using endogenous switching regression model. The results show the most commonly used ICT tool to access agricultural information was mobile phones (86%), radio (79%) and then television (59%). Findings revealed that age, education, household size, farm size, group membership, extension contact, credit access, installation of electricity and attributes of ICT tool significantly influenced the usage of ICT tools. Results suggest that optimal users of ICT tools realized more income per acre than they would have had they not used the ICT tools. While, sub-optimal users realized lower household income per acre than they would have had they not decided to use ICT tools in their agrienterprises. Usage of ICT tools is associated with a 98% and 28% gain in average household income for optimal and sub-optimal users, respectively. Hence use of ICT tools leads to increase in income of smallholder agrienterprises. Consequently policies targeting usage of ICT tools in agrienterprises must consider the age and education level of farmers when developing ICT tools for dissemination of agricultural information and should concentrate on improving the extension services, farmer groups and electricity access to rural areas.

CHAPTER ONE
INTRODUCTION
Background of the study
The performance of agrienterprises is of immense importance in most developing countries where agriculture remains the engine of growth. Agricultural sector is still the backbone of majority of sub-Saharan Africa countries economy, providing food, employment, foreign exchange and raw materials for industries (World Bank, 2014). It accounts for 24% of the gross domestic product (GDP) in sub-Saharan Africa states. Recent studies have also shown growth in GDP that originates from agriculture is about four times more effective in raising the incomes of a country’s poorest people as opposed to GDP growth derived from other sectors such as manufacturing (Fan et al., 2013).

In Kenya smallholder agrienterprises are the backbone of the economy, employing more than 75% of the total population; contributing about 30% to the GDP; bringing about 60% of the foreign exchange; and providing raw materials for local industries (KNBS, 2013). However, for agrienterprises to sustain sufficient market accessibility, they have to overcome various constraints, such as poor access to high quality seeds, limited knowledge of effective production and marketing practices. Additionally, ineffective pest and disease management practices threaten not only agrienterprises’ profitability when their produce is rejected (particularly by export markets), but also the health of farming households, consumers, and the environment (Ministry of Agriculture, 2014). According to Sife et al. (2010) to improve opportunities for trade especially at a global level agrienterprises need to continuously improve their competitiveness. They also need to improve their business environment or risk being trapped in producing low-skill, low-value products and services, which will lead to low market access.

The past decade has witnessed a revolution in the use of modern information communication and technology (ICT) tools (mobile telephony, radio and television) in managing agrienterprises. Evidences suggest that the technology is being effectively used in accessing market price information, weather forecasts, transport, storage facilities, crop and livestock diseases and general advice related to agriculture (Kirui et al., 2012). The most commonly used ICT has been mobile telephony which can cause significant benefits to agrienterprises through improved access to information, lower marketing costs, and thus higher profits and incomes. In addition to such direct effects, mobile phones are an enabling technology for other innovations. One important example is mobile phone based money transfers, which could be very relevant for rural agrienterprises that are often underserved by the formal banking system (Kirui et al., 2013). Again in Kenya, market information is provided through short message service (SMS) so that agrienterprises have access to daily agricultural commodity prices, extension messages and opportunities to sell or bid through text messages and voicemail (Munyegera et al., 2014).

Kenya’s agriculture sector comprises five major subsectors: horticulture, industrial crops, food crops, livestock and fisheries. This study focused on the pineapple agrienterprises in Gatundu North sub-County in Kiambu County who were using different ICT tools in running their businesses. The ICT tools that were considered included radio, television and mobile phones. Use of these tools has grown in number especially radio and television programmes which educate farmers on better agricultural practices. Such programmes include Shamba shape up, Seeds of Gold, Mugambo wa Murimi and Urimi (Nyoike, 2015). The integration of information, communication and technology (ICT) into pineapple agrienterprises helps in the transformation of smallholder farmers from their current subsistence level, marked by low productivity and low added-value, to an innovative, commercially-oriented, internationally competitive and modern agricultural sector’. ICT holds the key to this transformation since the use of mobile telephony, radio and TV seems to be an enabler, necessary to spur development of agrienterprises (World Bank, 2014).

Therefore, for these agrienterprises to function effectively and efficiently, they need good information on a variety of subjects such as production, marketing and consumption. It is expected that modern ICT can play a role in bridging the information gap and reduce the information asymmetry that exists between the large and the small agrienterprises by making the content precise, timely and localized and thus will enhance the dissemination of knowledge and information on technologies, inputs, markets and prices. This high use of ICT is likely to stimulate economic development (Mittal, 2012). Hence, use of ICT may contribute to a well-functioning agricultural markets which would lead to increase rural incomes and hence contribution to agrienterprises development. Therefore, this study aimed to examine factors that influencing use of mobile phones, radio and television and effect of their usage on performance of pineapple agrienterprises.

Statement of the problem
Mobile telephony, radio and television usage is gaining popularity in smallholder pineapple enterprises. Recently, public and private organizations have come up with initiatives that are using these facilities to provide agrienterprises with information they need to be productive and profitable. These ICT facilities such as mobile phones are also used by smallholder farmers to market their produce. Hence, the integration of these ICT facilities in pineapple enterprises is an important factor that may influence their performance. Moreover, their use may affect this enterprises inclusion in profitable commercial supply chains which offer a great driver for the development of vibrant agrienterprises. However, information on the choice of the ICT tools and the degree to which usage of these ICT tools influences the performance of pineapple enterprises is still not clear in empirical literature. Hence, this study sought to bridge this knowledge gap by determining the effect of ICT use specifically mobile telephony, radio and television on performance of pineapple agrienterprises in Kiambu County.

Objective
General objective
The general objective of this study was to contribute to enhanced ICT tools utilization in agrienterprises for improved livelihood of small-scale pineapple farmers in Gatundu North sub-County, Kenya.

Specific objectives
1. To characterize structure of ICT usage among smallholder pineapple agrienterprises.

2. To determine factors influencing use of ICT among smallholder pineapple agrienterprises.

3. To determine the effect of ICT use on income of smallholder pineapple agrienterprises.

Research questions
1. What is the structure of ICT usage among smallholder pineapple agrienterprises?

2. What are the factors influencing use of ICT among smallholder pineapple agrienterprises?

3. What is the effect of ICT use on income of smallholder pineapple agrienterprises?

Justification of the study
The horticultural sector specifically commercial pineapple farming plays a critical role in the social-economic development of Kenya economy. The focus on pineapple farming is an important factor in economic development with a potential for increasing incomes in rural areas, improving living standards and creating employment. This is because it is a high-value crop which is grown for commercial purposes. The agrienterprises’ role can only be aptly realized through the adoption of not only efficient and effective technologies but also its profitable systems. Therefore, it requires that the enterprises remains competitive to deliver. It is imperative that the various constraints to the agrienterprises competitiveness especially market access are effectively addressed if the sector is to remain relevant to economic development as envisioned.

ICT is taking centre stage in the growth and competitiveness of all sectors globally and there is need to apply ICT to improve agrienterprises competitiveness. By exploring the effect of ICT use on performance of pineapple agrienterprises, this study provides the necessary knowledge required for improving the sector’s competitiveness to enable it deliver to the country’s expectations. The findings from this study will help to provide valuable information to service providers, policy and decision makers on how best to develop ICT in order to benefit pineapple enterprises in accessing market information. It will enable these agrienterprises to make an informed choice of the ICT tool to adopt. This might lead to increased adoption and usage of ICT in pineapple agrienterprises, leading to increase on-farm employment and increased yields, increased farm incomes, increased product and process innovation.

Scope and limitations of the study
This study only focused on effect of mobile telephony, radio and television use on performance of pineapple smallholder agrienterprises in Gatundu North sub-County, Kiambu County. Information on the structure of ICT usage, factors influencing use of ICT and effect of these ICT platforms on income of agrienterprises was collected by use of structured questionnaire. The period of study under consideration was limited to 2015.

Operational definitions of terms
Agrienterprises – Within the study context is defined as commercially oriented farmers who are engaged in farming as a business for their economic and social development. They are assumed to have land holding between 0.5 – 2 Ha and have between 5-10 employees. They are engaged in mixed cropping including growing of fruits and vegetables for market, fruit and vegetable value addition, fresh fruit venture, and livestock mainly for milk and meat production.

ICT –Entail specific communication devices used by farmers in their enterprises to connect them to Agricultural knowledge, value chain networks and agricultural institutions. The study will mainly focus on mobile telephony and its money transfers, Radio and Television.

ICT Use - refer to adoption and intensity of use of any of the following devices (mobile phones, Radio and Television) for purposes of receiving weather, input and output market information, connect with service providers, customers, and coordinate enterprise day to day logistics.

Income- this refers to revenue that the smallholder farmers received from selling pineapples.

Optimal users – this refers to smallholder agrienterprises who had adopted and were using television, radio and mobile phones for purposes of receiving agricultural and output market information and gets maximum benefits from optimal usage of these tools.

Sub-optimal users – this refers to smallholder agrienterprises who had opted to adopt and use either television, radio, mobile phones or not to use the three ICT tools in their agrienterprises.

Performance: - Measuring the results of an agrienterprises’ operations in monetary whose results are reflected in the agrienterprises, return on investment, return on assets and value added.

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Item Type: Kenyan Material  |  Attribute: 78 pages  |  Chapters: 1-5
Format: MS Word  |  Price: KSh900  |  Delivery: Within 30Mins.
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