Farmers’ Access to Grain Marketing Information: Empirical Evidence from North Rift and Western Kenya by Martins Odendo1 and Hugo De Groote2 1
Kenya Agricultural Research Institute (KARI), P.O. Box 169, Kakamega, Kenya,
[email protected] 2
International Maize and Wheat Improvement Centre (CIMMYT) P. O. Box 1041-00621 Nairobi, Kenya,
[email protected]
© Kenya Agricultural Research Institute (KARI) 2006, Nairobi, Kenya. This file is only for personal, non-commercial use. Please contact the publisher regarding any further use of this work.
Correct citation: Odendo, M., De Groote, H., 2006. Farmers’ Access to Grain Marketing Information: Empirical Evidence from North Rift and Western Kenya. In: Wasilwa, L., et al. (eds.), Agricultural Research for Improved Productivity and Livelihoods. Proceedings of the 9th KARI Biennial Scientific Conference, Nairobi, 8-12 November. KARI, Nairobi, pp. 185-191.
FARMERS’ ACCESS TO GRAIN MARKETING INFORMATION: EMPIRICAL EVIDENCE FROM NORTH RIFT AND WESTERN KENYA M. Odendo1 and H. De Groote2 1
KARI-Kakamega, P.O. Box 169, Kakamega, Kenya 2
CIMMYT, P.O. Box 25171, Nairobi, Kenya
Abstract Lack of markets and poor marketing strategies are arguably the greatest challenges facing agricultural sector in Kenya. In the early 1990s, the Government of Kenya moved from interventionist policies whereby it maintained extensive controls over marketing of cereals. The cereal markets were thus predictable as prices were fixed by the State in a particular season. During that period, actors in the agricultural sector needed little information, other than buying and selling arrangements laid down by the State. Market liberalization created a situation where farmers no longer have guaranteed markets, prices are no longer fixed, central information source does not exist and the need for information increased. Unfortunately, most farmers have little or no access to marketing information. The objectives of this study were to: identify and describe existing grain marketing information systems for farmers; and determine reliability and usefulness of marketing information from the various sources to farmers. This study was carried out in traditionally grain surplus-and deficit zones in western Kenya. Multistage sampling technique was used in selection of the study sites and households. A sample of 91 farmers was interviewed using a structured questionnaire. Descriptive statistics were used to analyze the data. The study shows that farmers received marketing information from multiple sources. However, only telephone and field days were perceived to be the most reliable sources, though only a handful of farmers obtained information from the sources. Eighty-six percent and 55% of the farmers in grain surplus and deficit zones, respectively, recognized that marketing information is very important. Despite receipt of some marketing information by some farmers, most of them were not utilizing the information. This was mainly attributed to lack of blending market information with other modes of promoting agricultural development such access to grain storage, transport and credit facilities, and unreliability of the information. Smallholder farmers should, thus be catalyzed to form strong and working associations so as to enjoy economies of scale in accessing markets. On the basis of asymmetry of information provided by private sector or individuals such as traders and farmers, as reported by farmers as being unreliable, it is recommended that the public sector ought to provide marketing information as a public service to improve market transparency. There is need for the public agricultural extension service providers to integrate marketing information into routine extension messages. Introduction Input and output marketing systems play key roles in adoption of agricultural technologies. If farmers do not have efficient input and output markets, they resist investing in new and more productive technologies (Oechmke and Grawford, 1993). Lack of markets and poor marketing strategies are arguably the greatest challenges facing the agricultural sector in Kenya and the rest of Africa (Argwings-Kodhek, 1998; Robbins, 2000). Therefore, anything that can be done to considerably reduce the cost and difficulties of linking producers to ultimate consumers such as building roads, providing storage facilities and supplying marketing information forms a central feature of any development in Africa (Robbins, 2000). Robbins (2000) defines a market information system (MIS) as any channel of communication of information about markets between interested parties. Marketing information can help predict, strategize, plan and act expediently, rationally and efficiently (Mundy and Sultan, 2001), thus reducing business risk, transaction costs and enabling market participants to explore business opportunities (NRI, 2001; Robbins, 2000). However, the value of information comes from its use (Kotler and Armstrong, 2001). A study of the value of weather information on production (Babcock, 1990) shows that farmers might gain individually from the information, but the agricultural sector as a whole may lose because of supply-enhancing effect of updating of information.
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Prior to market liberalization in the 1990s, the Government maintained extensive controls over marketing of cereals through the National Cereals and Produce Board (NCPB) as the sole buyer and seller of cereals and their products (KARI, 1996; GoK, 2000) and the cereal market were thus predictable as prices were more or less static in a particular season. During that period, actors in the agricultural sector needed little information, other than buying and selling arrangements laid down by the state. The basic tenets of market liberalization are to improve competitiveness and functioning of markets. The necessary conditions for market competitiveness are availability of information, high number of price taker buyers and sellers and absence of barriers to entry (Samwelson, 1990; Kuyvenhoven et al. 1998). Therefore, an effective MIS is a key instrument of the liberalization policy for the agricultural sector and may contribute to solution of some of cereals marketing imperfections. Without sufficient and transparent information about who has what goods, what quantities of the commodities are available for sale, who wants what, and how much commodities to buy and at what price, the liberalized market does not work efficiently because the market cannot provide a level playing ground for buyers or sellers. Liberalization created a situation where there is no central information source and the need for information now surpasses any period in the past (GoK, 1994; Argwings-Kodhek, 1998). For producers, market liberalization means that they no longer have guaranteed markets, as the prices are no longer fixed. The objectives of this study were to: identify and describe existing grain marketing information systems for farmers; and determine reliability and usefulness of marketing information from the various sources to farmers. Methodology The study was carried out between June and November 2002 in Lugari and Trans Nzoia Districts (grain surplus zone) in the North Rift of the Kenyan highlands, and Kakamega and Vihiga districts in the traditionally grain deficit moist midland zone around Lake Victoria. Sampling design, data collection and analysis Multistage stratified sampling technique was used in selection of the study sites and households. The approach was meant to capture diversity in marketing information related to grain trade by selecting contrasting study sites. A sample of 91 farmers (56 from grain surplus and 35 in deficit areas) was also selected by systematic random sampling using village household lists as the sampling frames. Enumerators, who were trained on field survey techniques, collected the data from farmers using a structured questionnaire. Descriptive statistics were used to analyze data. Results and Discussion Socioeconomic profiles of respondent households Key socioeconomic characteristics of the surveyed households are shown in Table 1. Most households (83.5%) were male-headed. The mean age of the household heads was 49.7 and 49.3 years in the grain deficit and surplus zones, respectively. The surveyed farmers had practiced farming for 24 years in grain deficit zone and 20 years in surplus zone. The average size of the households for deficit and surplus zones were seven and nine respectively. Most household heads of the sampled households were primary school leavers. Farmers’ ownership of and access to assets relevant to communication Most of the farmers (94.5%) owned radio, 39 % had television and 22% owned telephone (Table 2). Liberalization has led to competition in electronic industry and this has resulted in affordable radios models flowing to rural areas for updating the rural folk with information.
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Table 1–Farm-farmer socioeconomic characteristics of sampled households Characteristic Deficit n=35 Surplus n=56 Sex of household head Male % 85.7 82.1 Female % 14.3 17.9 Mean age of household head (years) 49.7 (16.1) 49.3(13.0) Number of persons/household 6.9 (2.8) 8.7 (3.6) Farming experience (years) 23.9(13.9) 19.8 12.1) Years of formal education 7.8 (3.9) 9.4 (3.4) Mean farm size (acres) 2.8 (2.3) 18.9 41.1) Mean (%) maize harvest sold 23.1(27.1) 58.1 29.9) Mean (%) haricot bean sold 16.6 (22.7) 34.5 33.9) Mean (%) farm income to total 47.3 (34.0) 65.8 31.0) income Note: Figures in parentheses are standard deviations
Overall=91
P-value
83.5 16.5 49.5 (14.2) 8.0 (3.4) 21.4 (12.9) 8.8 (3.7) 14.2 (35.7) 44.7 (33.4) 27.6 (31.2) 58.7
0.89 0.66 0.16 0.05 0.01 0.00 0.03 0.01
Table 2–Farmers’ access to assets relevant to information and transport communication Asset Deficit zone Surplus zone Overall Radio 94.3 94.6 94.5 Television 17.1 51.8 38.5 Telephone 8.6 30.4 22.0 Vehicle 0.0 23.6 14.4
The low proportion of farmer owning televisions and telephones are associated with the high cost of the sets. However, a clear distinction between deficit and surplus areas is evident: in the surplus areas, a majority of farmers own televisions (52%), compared to a small proportion in deficit areas (17%). Similarly, 30% of farmers in the surplus area owned telephone, compared to only 9% in the deficit area. Mobile phones comprised most (90%) of the telephones owned by farmers, the rest owned landlines. Again, 81% of the mobile phone owners were in the maize surplus zone. Farmers’ perceptions on the importance of marketing information Farmers’ perceptions on the importance of market information are critical in determining whether they would seek and use market information. Figure 1 shows farmers’ perceptions on importance of market information. Most (74%) of farmers considered marketing information as very important, and 24% as somewhat important. Only 2% do not consider it important. However, going by zones, 86% and 55% of the farmers in surplus and deficit zones, respectively recognized that market information is very important. A relatively higher proportion of farmers (38.4%) in surplus zone and a paltry 14.3% in grain deficit zone observed that information is somewhat important. About 6% of the farmers in the deficit zone reported that marketing information is not important at all, whilst none in the surplus zone reported so.
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2% 24% Very important Somewhat important Not important
74% Fig. 1-Farmers' perceptions of importance of market information in North Rift and western Kenya
100 90 80 70 60 50 40 30 20 10 0
Deficit
m er s R ad io Br Ex o ke te ns rs io n vi s N ew its sp ap Tr an er sp or te rs N C PB O th er Te s le ph on Fi e el d da ys
Fa r
de rs
Surplus
Tr a
Percent farmers
Sources of marketing information Farmers need marketing information to make good production and marketing decisions. Respondent farmers obtained marketing information from multiple sources. Figure 2 shows the main sources of market information for farmers by zone. Overall, the most frequently cited source was traders (68%), followed by farmers (70%), radio (24%) daily newspapers, brokers (17%), and extension visits (13%). The least used sources are telephone (1.2%), transporters (8.3%) and NCPB (2.2%). Surprisingly, radio was a source of market information for a few farmers, yet over 80% of the farmers owned radio. This is mainly attributed to, first, cessation of broadcast of marketing information in 1994 by KBC radio, which has wide coverage and high listener ship. Secondly, there is lack of congruence between the time marketing information is relayed and the time the farmers listen to the radio broadcasts.
Information sources
Fig. 2-Major sources of marketing information for farmers in western Kenya
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Marketing information farmers received and additional information desired Farmers expressed preference for certain information not currently or adequately provided by the present MIS. Maize and beans were chosen to illustrate the additional information farmers would like to obtain from the MIS. Quantity of stock in the market and quality of the products demanded were the most frequently reported as additional information required. Equal proportion of farmers (22%) expressed preference for information on quality for both maize and beans (Fig. 3). Quality, particularly moisture content, proportion of foreign particles, and rot were crucial for farmers who sold to NCPB.
60
percent farmers
50 40
Maize Beans
30 20 10 0 Quality
Stocks at market
Information type
Quality and stocks
Other products
Fig. 3-Additional information farmers require
Reliability of farmers’ sources of information Figure 4 shows farmers’ perceptions of reliability of information from various sources. Telephone and field days were perceived to be the most reliable sources. However, only a handful of farmers obtained information from the source.
100 80 60 40 20
ep h
on Fi e el d da ys N C PB O th er N ew s Ex sp ap te ns er io n vi si t Fa s rm er s Br ok er s Tr ad Tr er an sp s or te rs R ad io
0
Te l
Percent farmers
120
Information sources Fig. 4-Farmers' perceptions of reliability of information received from different sources
189
High Moderate Low
Utilization of information received by farmers Importance of information is determined by whether it is used or not. When farmers were asked to state the degree to which they utilize the market information they obtain from various sources, the farmers who obtained information from telephone, traders and newspapers reported that they extensively use the information (Fig. 5).
Percent farmers
120 100 80
Extensively used
60
Not used Some used
40 20
er s Te le ph on e Fa rm er s Tr an sp or te rs Fi el d da ys Ex te ns io n
Tr ad
R ad io
N ew sp ap er
0
Information sources
Fig. 5-Farmers' rating of use of marketing information
Conclusions and Recommendations Empirical evidence of this study shows that farmers received marketing information from various sources, mainly from private sector and individuals. The information systems provided mainly price information. Moreover, most of the information the farmers received was considered unreliable. On the basis of asymmetry of information provided by private sector or individuals, it is recommended that the public sector should provide marketing information as a public service to improve market transparency. The Ministry of agriculture should negotiate with the public radio stations so that they can broadcast the information as a public service. In addition, there is need for the public agricultural extension service providers to integrate marketing information into routine extension messages. Less than half of the farmers extensively used marketing information they received. Yet the value of information depends on willingness and ability to act on the obtained information. The study indicates that marketing information is only a necessary condition for accessing markets. The sufficient condition is to address the other problems that bedevil access to markets in a holistic approach through blending of marketing information with other modes of promoting agricultural development such access to grain storage, transport and credit facilities. Farmers, especially smallholders should be catalyzed to form strong and working associations so as to enjoy economies of scale in accessing marketing information and related marketing services. Acknowledgement We acknowledge, with thanks, Post Harvest Processing Network (FOODNET) through CIMMYT-Nairobi, for financial support. Many thanks also go to the Center Director, KARIKakamega, Dr. Omari Odongo, for his support. Special thanks to Patrick Oucho, Beatrice Kubasu, Nashon Ambitsi, Stephen Okumu, and Ishmael Njarro for administering the questionnaires. We thank our colleagues at KARI-Kitale: Japhether Wanyama and Morgan Mutoko, and the staff of the Ministry of Agriculture for their help in data collection. Many thanks farmers and officials of different organizations for taking time to discuss with us.
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