Effect of social capital on performance of smallholder farmer organizations in Western Kenya

Abstract

Development literature has recently promoted the use of producer organizations in linking farmers to better-paying commodity markets. However, empirical studies find mixed performance of such organizations. This study examines the producer organizations’ internal factors that may explain the differences in the performance of producer organizations. The study specifically analyzes the role of social capital, within a producer organization, on the performance of such organization using quantitative techniques. The level of commercialization is used as proxy of organization’s performance. The study finds that social capital positively affects the performance of producer organizations. These findings imply that development strategies that target the promotion commercialization of smallholder agriculture through producer organizations should pay attention to the internal factors within such organizations.