An evalvation of smallholder snow peas market organisation and performance in Buuri and Laikipia east districts, Kenya

Abstract

The snow pea is a high value demand driven fresh vegetable mainly grown for export markets with a marketing system characterized by various marketing channels. About 70 percent of smallholder snow peas producers prefer and use the spot marketing channel whose structure, conduct and performance is not known. The purpose of this study was to examine the organization and performance of the smallholder snow peas marketing system, in Buuri and Laikipia East Districts of Kenya The survey was conducted in Timau, Nanyuki, Ngusishi and Mia moja markets which were purposively selected from eight snowpeas operating markets along the border of the two Districts. A snowball sampling procedure was used to select 85 traders who were interviewed using structured questionnaire. The market structure of the snowpeas was analyzed using market concentration ratio, barriers to entry and market integration. Specifically the Hirschman Herfindahl Index (HHI) was used to indicate the concentration and hence the competitiveness of the market. The performance of the market was analyzed using the pricing inefficiency model Market conduct involved the analysis of traders' behavioral patterns in trade with respect to price and traded quantity among others variables. Findings showed that the marketing system had an active number equivalent of traders involved in the trade of between 63 and 52 with HHI values of 0.019 and 0.016 respectively. Capital was found to be a major barrier to entry into the smallholder snow peas trade. These findings indicated that the smallholder snowpeas market system was lowly concentrated and competitively organized. Out of the total marketing costs, Transport and brokers commission costs were the first and second most important costs respectively. The pricing efficiency of the smallholder snowpeas marketing system was found to be moderate at around 50 percent. The policy implications ansmg from this study are that in order to further improve on the performance of the smallholder snow peas marketing system, capital access and formation by the traders should be achieved by facilitating easy access to credit. The government should improve on transport infrastructure and provide cold storage. Formation of marketing alliances and/or cooperatives society should be promoted. These would eliminate the high broker commission in the marketing system. Timely and comprehensive market information should be provided, to both the producers and the traders, through the existing agricultural extension services. Studies on whole smallholder snowpeas value chain identifying levels of inefficiencies in the chain are recommended.