Horticultural marketing channels in Kenya : structure and development

This study analyses the structure and development of horticultural marketing channels in Kenya. It is based primarily on a farm survey among some 500 farmers in Nyandarua, Kisii and Taita Taveta Districts and a trade survey of about 750 horticultural traders in 18 different market places. The surveys were carried out between 1990 and 1992 as part of the Food and Nutrition Studies Programme.The book first describes the producers that bring horticultural commodities into the channels and then the actors and institutions that operate in those channels. Traders selling in the domestic market, agents, facilitating intermediaries, export traders, marketing cooperatives and processors are all reviewed. There is a particular focus on collecting wholesalers. It is shown that they increase the efficiency in the marketing channel to the benefit of both farmers and distributing wholesalers. The development of rural assembly markets, in which the collecting wholesalers sometimes operate, is also examined. It is concluded that such markets evolve in production areas with relatively poor farm accessibility and low supply concentration, because they reduce the transport and/or information costs of suppliers and buyers.The central research question of the study is what factors determine vertical differentiation in Kenyan horticultural marketing channels. A model is developed which seeks to explain this process. The first two explanatory factors found significant are the population of the market centre where the surveyed market place is located and population density of the rural hinterland. These are indicators of the consumer population served by the marketing channel. Other factors are transport time of the commodity from producer to consumer, keeping qualities of the commodity, and turnover of the traders.The analysis shows that marketing channel theory can be of relevance to the developing world. The vertical differentiation model proposed here can aid in predicting future changes in horticultural marketing systems in emerging African economies. The findings suggest that gravity models may also contribute to a better understanding of the structure of marketing channels in developing countries