An Analysis of Rice Marketing in Kenya: a Case Study of Kano Plains

Abstract

Most of the cereals including Rice are marketed through the National Cereals and Produce Board (NCPB). The existence of a parallel market for rice has resulted into excessively high margins to traders with a likelihood of exploiting farmers who sell in these markets. This case study aimed at investigating the constraints to supply of rice from a marketing point 01 view. The approach taken to study the supply was by considering the response of marketed output of paddy. Paddy can be withheld at farm level as a process of choice or due to lack of marketing. outlet. The timing of sales by the producers was also considered. These phenomena have implications on short run shortages and losses to the farmers. The producer price uncertainty to the farmer gives a certain probability of farmers exploitation. Withholding of supplies therefore involves benefits and costs to different economic units. The study utilized statistical and econometric tools to investigate some hypotheses. This study found out that farmers adopted different marketing strategies. Traders likewise adopted a certain pattern of trade. Existence of withholding of supplies at farm level was noted especially for farmers far removed from the markets indicating that both choice behaviour and marketing problems are contraints to the market supply. The significant factor explaining the variation in marketed output across farm households was the total farm production of paddy. Family size was found not having positive correlation with quantities withheld. Producer price variation across farms and from the government's gazzeted floor price gave evidence that farmers were being exploited at varying degrees. Trading margins were high in the first marketing stage. These findings were used to draw policies in two areas. Policies that increase quantity of paddy supplied and those which improves the marketing efficiency were suggested.