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Choice of Coordination Mechanism in the Kenyan Fresh Milk Supply Chain

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  • Awudu Abdulai
  • Eliud A. Birachi

Abstract

This paper examines the nature and determinants of coordination mechanisms used in the Kenyan fresh milk supply chains, using recent survey data of market participants from Nakuru and Nyandarua districts in Kenya. Three main contractual arrangements are observed in the fresh milk supply chain. These include spot markets, verbal contracts and written contracts. The empirical results indicate that though written contracts are sparingly used in the milk transactions, milk producers are more likely to adopt such contracts compared to traders. The results also show that location of producer, source of market information, distance to markets, travel time to buyers or suppliers, gender of operator, and presence or absence of enforceable contracts significantly influence the type of coordination mechanism used in both producer-buyer and retailer-seller transactions and travel time to milk suppliers. Copyright 2009, Oxford University Press.

Suggested Citation

  • Awudu Abdulai & Eliud A. Birachi, 2009. "Choice of Coordination Mechanism in the Kenyan Fresh Milk Supply Chain," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 31(1), pages 103-121.
  • Handle: RePEc:oup:revage:v:31:y:2009:i:1:p:103-121
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    File URL: http://hdl.handle.net/10.1111/j.1467-9353.2008.01428.x
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    References listed on IDEAS

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    1. Greif, Avner, 1993. "Contract Enforceability and Economic Institutions in Early Trade: the Maghribi Traders' Coalition," American Economic Review, American Economic Association, vol. 83(3), pages 525-548, June.
    2. Zaibet, Lokman T & Dunn, Elizabeth G, 1998. "Land Tenure, Farm Size, and Rural Market Participation in Developing Countries: The Case of the Tunisian Olive Sector," Economic Development and Cultural Change, University of Chicago Press, vol. 46(4), pages 831-848, July.
    3. Marc F. Bellemare & Christopher B. Barrett, 2006. "An Ordered Tobit Model of Market Participation: Evidence from Kenya and Ethiopia," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(2), pages 324-337.
    4. Steven Were Omamo, 1998. "Transport Costs and Smallholder Cropping Choices: An Application to Siaya District, Kenya," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(1), pages 116-123.
    5. Poole, Nigel D. & Del Campo Gomis, Francisco J. & Julia Igual, Juan F. & Vidal Gimenez, Fernando, 1998. "Formal contracts in fresh produce markets," Food Policy, Elsevier, vol. 23(2), pages 131-142, April.
    6. repec:mes:jeciss:v:30:y:1996:i:4:p:1212-1216 is not listed on IDEAS
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    Cited by:

    1. Baker, Derek & Mtimet, Nadhem, 2013. "It depends who you ask: How to establish a sampling frame for traders?," 2013 AAAE Fourth International Conference, September 22-25, 2013, Hammamet, Tunisia 159701, African Association of Agricultural Economists (AAAE).
    2. Boniface, Bonaventure & Gyau, Amos & Stringer, Randy, 2009. "Relationship quality as the predictor of long term relationship in the Malaysian dairy industry," MPRA Paper 24420, University Library of Munich, Germany.
    3. Wanglin Ma & Awudu Abdulai, 2016. "Linking apple farmers to markets: Determinants and impacts of marketing contracts in China," China Agricultural Economic Review, Emerald Group Publishing, vol. 8(1), pages 2-21, February.
    4. Mailu, Stephen & Wachira, Ann, 2009. "The influence of prices on market participation decisions of indigenous poultry farmers in four districts of Eastern Province, Kenya," MPRA Paper 21312, University Library of Munich, Germany.
    5. Alemu, Abebe Ejigu & Mathijs, Erik & Maertens, Miet & Deckers, Jozef A. & Gebregziabher, Kidanemariam & Baur, Hans & Gebrehiwot, Kindeya, 2011. "Trader-supplier Coordination in the Agrifood Supply Chains in Northern Ethiopia," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114218, European Association of Agricultural Economists.

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