Effect of small-scale hides and skin business on trader’s income in Nakuru County, Kenya

Abstract

Hides and skin, the by-product from cattle and small ruminants forms an important business from the meat industry which forms part of livestock production. There is concentration on hides and skin production in the high potential Arid and SemiArid regions in Kenya while neglecting the regions that produce them on small scale thus creating the research gap. The aim of this study was to contribute to the development and sustainability of the leather sector among the non-pastoralist communities by determining the challenges facing the traders in the industry, factors influencing the trader’s participation in the industry and the effect of the hides and skin business on the income of the trader. A census of 100 hides and skin traders was done in Nakuru County (0.4254° S, 36.0023° E). The study used both primary and secondary data and data was collected using a questionnaire. The Cronbach Alpha reliability coefficient for the questionnaire was 0.928, which was within an acceptable threshold of 0.7. Percentiles were used to determine the challenges facing the hides and skin traders in the industry in objective one. The logistic regression model was used to determine the factors influencing the participation of the hides and skin traders in the leather sector and lastly a combination of the Gross Margin (GM) and the Endogenous Switching Regression (ESR) model to evaluate the impact of the hides and skin business to the income of its traders in the county. The results indicated that the main challenge that affects hides and skin traders is fluctuating prices at 56% and the lowest being poor condition of their working premise at 2%. Age, education, ability to store hides and skin, amount of legal fee that traders pay to do business, the approximated income that they get from the business, the actual gross margin realized, the average price of hide and the average price of sheep skin were important factors that influenced traders participation in the leather industry. Lastly from the study, if a middleman had decided to be an owner of a registered premise, then he/she would be expected in a month, to have attained more income by $18 (KES.2, 174) than the owners of registered premises and on the Contrary, if an owner of registered premise had decided to be a middleman then his/her income would reduce by $54 (KES 6,371). In conclusion, Ownership of a registered hides and skin premise leads to an increase in the income of a hides and skin trader. Consequently there’s need for youth empowerment and sensitization on proper utilization of hides and skin to not only earn income but also minimize on wastage of a useful resource which is byproduct from livestock industry and also supports a valuable leather industry.