Effect of Entrepreneurial Behaviour on Competitive Advantage and Performance of Small Scale Potato Enterprises in Molo Sub County, Kenya

Abstract

Small scale potato enterprises play a central role in creation of jobs and wealth creation for 3.8 million potato farmers along the potato value chain in Kenya. Although, potato roduction and marketing emerges as a promising farm enterprise that can contribute to increased incomes fosmallholder potato farmers. There is little or lack of mpetitiveness among potato farmers.This study intended to fill this knowledge gap by determining the effect of entrepreneurial behaviour on the competitive advantage and performance of mall scale potato enterprises in Molo Sub-County, Kenya. To achieve this, levels of smallholder potato farmers’ entrepreneurial behaviour were determined and, challenges facing small scale potato enterprises characterized. Furthermore, the effect of entrepreneurial behaviour on competitive advantage and performance of small scale potato enterprises was determined. The study used multistage sampling techniques to sample 267 smallholder potato farmers using semistructured questionnaires and data analyzed using STATA version 15. Analytically, an entrepreneurial behaviour index was developed and used to generate the levels of entrepreneurial behaviour. Secondly, a multivariate probit model was used to determine the effect of entrepreneurial behaviour on competitive advantage. Finally, seemingly unrelated regression was used to analyze the effect of entrepreneurial behaviour on performance of small scale potato enterprises. The study results found that the majority of smallholder potato farmers had a medium level of entrepreneurial behaviour. In addition, the main challenges facing small scale potato farm enterprises included high pest and disease infestation, unfavorable weather conditions, high cost of agro-chemicals, poor price for potato and exploitation by brokers. The multivariate probit results showed that risk-taking ability, proactiveness, innovativeness, information-seeking, cosmopoliteness and decision-

making ability more likely influenced small scale potato farmers to gain a competitive vantage in the small scale potato enterprises. The seemingly unrelated regression results showed that risk-taking ability affects performance of small scale potato enterprises in Molo Sub-County, Kenya. The study concludes that farmers possess medium entrepreneurial behaviour that constrains them in achieving sustainable competitive advantage and improving performance of potato enterprise activities. The study recommends that farmers should be provided with training on seasonal climate change, use of certified seeds, access to farm credits and participate more in farmer groups. This could build their farming capacity for increased competiveness and improved performance of potato enterprises. Overall, potato value chain actors need to come up with supportive programs that help nurture and harness entrepreneurial farming practices and behaviour skills among the smallholder potato farmers.