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Leveraging institutions for collective action to improve markets for smallholder producers in less-favored areas

Author

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  • Shiferaw, Bekele A.
  • Obare, Gideon A.
  • Geoffrey, Muricho
  • Silim, Said

Abstract

Using survey data from the community, producer marketing groups (PMGs) and farm households in Kenya, this paper investigates the potential of rural institutions (farmer organizations, their rules and enforcement mechanisms) for remedying pervasive market imperfections and facilitate access to new technology in rural areas. Qualitative and quantitative analyses show that while the functioning of markets is constrained by high transaction costs and coordination failures, PMGs present new opportunities for small producers through vertical and horizontal coordination of production and grain marketing. They pay 20 to 25% higher prices than other buyers and facilitate the adoption of improved varieties that help increase marketable surplus. Their accumulated assets and traded volumes are influenced by participatory decision making, member contributions and initial start-up capital. While participation declines with farm size, the associated benefits depend on marketed amounts. Moreover, the time lag to payment for deliveries makes PMGs less attractive marketing channels for the poor. The success of such groups requires policy support, increased capital access, rural finance and market information.

Suggested Citation

  • Shiferaw, Bekele A. & Obare, Gideon A. & Geoffrey, Muricho & Silim, Said, 2009. "Leveraging institutions for collective action to improve markets for smallholder producers in less-favored areas," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 3(1), March.
  • Handle: RePEc:ags:afjare:56941
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    Citations

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    Cited by:

    1. Momanyi, Denis & Lagat, Prof. Job K. & Ayuya, Dr. Oscar I., 2016. "Analysis of the Marketing Behaviour of African Indigenous Leafy Vegetables among Smallholder Farmers in Nyamira County, Kenya," MPRA Paper 69202, University Library of Munich, Germany, revised 27 Jan 2016.
    2. Herbert, Ainembabazi & Asten, Piet & Vanlauwe, Bernard & Ouma, Emily & Blomme, Guy & Birachi, Eliud & Manyong, Victor M. & Macharia, Ibrahim, 2015. "Improving the adoption of agricultural technologies and farm performance through farmer groups: Evidence from the Great Lakes Region of Africa," 2015 Conference, August 9-14, 2015, Milan, Italy 210939, International Association of Agricultural Economists.
    3. Fischer, Elisabeth & Qaim, Matin, 2012. "Linking Smallholders to Markets: Determinants and Impacts of Farmer Collective Action in Kenya," World Development, Elsevier, vol. 40(6), pages 1255-1268.
    4. Ellen Verhofstadt & Miet Maertens, 2014. "Smallholder cooperatives and agricultural performance in Rwanda: do organizational differences matter?," Agricultural Economics, International Association of Agricultural Economists, vol. 45(S1), pages 39-52, November.
    5. Kiprotich Sigei, Geoffrey, 2014. "Determinants of Market Participation Among Small-Scale Pineapple Farmers in Kericho County, Kenya," Research Theses 243452, Collaborative Masters Program in Agricultural and Applied Economics.
    6. Momanyi, Denis, 2016. "Analysis of the Marketing Behavior of African Indigenous Leafy Vegetables Among Smallholder Farmers in Nyamira County, Kenya," Research Theses 243443, Collaborative Masters Program in Agricultural and Applied Economics.
    7. Wollni, Meike & Fischer, Elisabeth, 2012. "Commitment in Collective Marketing Relationships: Evidence from Coffee Cooperatives in Costa Rica," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126884, International Association of Agricultural Economists.
    8. Otieno, Zipora & Okello, Julius J. & Nyikal, Rose & Mwang'ombe, Agnes & Clavel, Daniele, 2011. "The role of varietal traits in the adoption of improved dryland crop varieties: The case of pigeon pea in Kenya," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 6(2), September.
    9. Malan, Benoît & Saitone, Tina L. & Sexton, Richard J., 2015. "Marketing Cooperatives in Developing Countries: Who Joins Them and How Can They Do Better?," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205522, Agricultural and Applied Economics Association;Western Agricultural Economics Association.
    10. Fischer, Elisabeth & Qaim, Matin, 2011. "Smallholder Farmers and Collective Action: What Determines the Intensity of Participation?," Discussion Papers 108551, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    11. Fischer, Elisabeth & Qaim, Matin, 2011. "Smallholder Farmers and Collective Action: What Determines the Intensity of Participation?," Proceedings of the German Development Economics Conference, Berlin 2011 28, Verein für Socialpolitik, Research Committee Development Economics.
    12. Okello, Julius J. & Kwikiriza, Norman & Kakuhenire, Rogers & Parker, Monica & Schulte-Geldermann, Elmar & Pambo, Kennedy, 2015. "Micro and meso-level issues affecting potato production and marketing in the tropical highlands of Sub-Saharan Africa: The known and the unknowns," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205464, Agricultural and Applied Economics Association;Western Agricultural Economics Association.
    13. Verhofstadt, Ellen & Maertens, Miet, 2013. "Cooperative membership and agricultural performance: Evidence from Rwanda," Working Papers 157389, Katholieke Universiteit Leuven, Centre for Agricultural and Food Economics.
    14. Mwangi, Backson & Obare, Gideon A. & Murage, Alice, 0. "Estimating the Adoption Rates of Two Contrasting Striga Weeds Control Technologies in Kenya," Quarterly Journal of International Agriculture, Humboldt-Universität zu Berlin, vol. 53.

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