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Commercialization of Smallholder Horticultural Farming in Kenya

Poverty, Gender, and Institutional Arrangements

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Beatrice Wambui Muriithi

This study assesses income and poverty effects of vegetable commercialization in Kenya with a special focus on gender issues and evaluates the performance of institutional arrangements that link small producers to the high-value vegetable supply chains. Using econometrics analysis of two rounds of rural household survey, the study reveals that the participation of smallholders in the domestic and export vegetable markets is declining. Weather risks, high costs of inputs and unskilled labour as well as erratic vegetable prices contribute to the declining trend. The impact evaluation of market participation reveals that households supplying the export market have a higher per capita income. The examination of gender roles indicates that the improvement of land productivity and the promotion of women’s access to agricultural training and extension services might enhance their market participation. The analysis of vegetable contractual arrangements indicates that the governance structure is important to the profitability and hence the sustainability of farmer-trader relationships.
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Chapter Five

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5. Commercialization of Smallholder High-Value Horticultural Farming: Institutional Arrangements, Transaction Costs and a Cost-Benefit Analysis of Kenya’s Vegetable Producers

5.1 Introduction

In recent years, in Africa as in other parts of the developing world, agricultural production systems and their participants have faced significant challenges in the face of changing economic, environmental, and sociopolitical backgrounds. Changing environmental conditions such as increasing unpredictability of weather patterns (extreme temperatures, and precipitation events) and declining productivity of land pose challenges to the agriculture dependent communities (Kirsten et al., 2009; Kristjanson et al., 2012). The globalization of agricultural economies presents farmers with opportunities as well as challenges. While free trade agreements have increased market access for some commodities, they might have negatively affected smallholders, who are forced to compete with both local producers as well as farmers from other countries (GoK, 2012). The globalization of markets has also brought new production and marketing regulations as well as new risks and uncertainties related to volatile global food prices, and financial crises among other global concerns. Consumer demand for traceability of produce to its origin is increasing in order to facilitate monitoring of food quality and safety (Jensen, 2006). Consumer preferences are also changing as income increases pair with rising demand for easy-to-cook food, thus influencing agricultural supply chains.

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