Determinants of smallholder farmers market participation; A case study of rice marketing in Ahero irrigation scheme

Abstract

The extent of market participation among smallholder farmers indicates the level of commercialization of rural production. The marketed surplus reaches the urban consumers and other rural non-producers through market participation by the producing households. During the government management, rice farmers within the Kenya National Irrigation Schemes were compelled to deliver all their output to the National Irrigation Board mills for milling and marketing. Currently farmers market their own rice and make any use decisions with their output, a case that attracted many private traders. The entry of the private sector traders is often regarded as a motivation to a wide number of participants. The objective of the study was to characterize smallholder rice farmers in Ahero Irrigation Scheme, determine the rice marketing outlets and their price differential, determine the factors that influence smallholder farmers’ choice of marketing outlets and the extent of market participation. The study was conducted in Ahero irrigation Scheme, in Kisumu County Kenya. Multistage sampling procedure was employed to contact 182 respondents and a semi-structured and pre-tested questionnaire used to collect data from smallholder rice farmers in the scheme through face to face interview. The data was analyzed using descriptive statistics, Multinomial Logit Model and Multiple Regression model. SPSS and STATA computer programs were used to process the data. Among the five marketing outlets, Private Millers handled 39% of rice produce, followed by NIB Millers 30.8%, Brokers 20.9%, Others outlets 7.1% and last was Consumers with 2.2%. It emerged that there was statistically significant price differentials among the various participating marketing outlets. Choice of marketing outlet was significantly influenced by age, gender, years of education, land tenure, contract marketing, regular buyer, market distance, group marketing and market information source. The result indicated that about 89% of rice produced in the scheme was marketed. Eight factors; household size, off farm income, grading, group marketing, source of market information, level of output, extension services accessed and access to credit significantly influenced the extent of rice marketing among the farmers. Based on the results of this study, there is need to harmonize rice prices to benefit all the farmers. Market information and extension services should be timely delivered to farmers to empower them with market opportunities and market demand and more farmer friendly credit institutions be made accessible to farmers to ensure greater depth of outreach in provision of credit.