Structure, Conduct And Performance Of Soybean Marketing In Embu, Tharaka Nithi And Meru Counties, Kenya

ABSTRACT

Soybean has the potential of contributing significantly to Kenya’s national objective of enhancing food security. The demand of soybean has increased from roughly 150,000MT in 2008 to 220,000MT in 2011, while supply is roughly between 50,000MT to 120,000MT. Many efforts have been put in place by the government to increase on the production and productivity of soybean. However, soybean farmers are faced with the difficulty in accessing the market, while on the other hand traders are experiencing an insufficient supply. Little is known about the soybean market in the central highlands of Kenya. This study therefore aimed at assessing the structure, conduct and performance of soybean markets. Specifically, the study determined the structure of the soybean market, the conduct and performance of the soybean market as well as opportunities and challenges affecting the marketing of soybean in Embu Tharaka-Nithi and Meru Counties. Key informant interviews were carried out among soybean farmers’ groups (16), Ministry of Agriculture Livestock and Fisheries (3) and soybean processing companies. A structured questionnaire was administered to respondents comprising of processors (16), wholesalers (15), retailers (86) and assemblers (3). Data was collected mainly on characteristics of respondents and marketing information such as quantities of soybean traded by wholesalers and traders, pricing, availability of price information and access to market. Data was used to calculate Herfindahl Hirschman Index (HHI), gross margins, marketing margin, and marketing efficiency. The results showed that there were eight (8) important marketing channels. Channel one the shortest (farmer-consumer) and channel three the longest (farmer, assembler, wholesaler, retailer and consumer). The HHI showed that wholesalers were competitive (0.0997); retailers were relatively competitive (0.1701) while processors indicated an oligopolistic market structure with an HHI index of 0.18 which is highly concentrated. Farmers, wholesalers and assemblers sold their soybean to processors at a fixed price given by the processors. The prices ranged from Ksh 58 to Ksh 70. Quantities traded were low with an average of 333.3kg for wholesalers, 793.33kg for assemblers and 47kg for retailers in the year 2016’. There were no trader associations in the study area even though farmers engaged in group marketing. Marketing Efficiency Indices revealed that Channel one was the most efficient. Constraints to marketing by farmers include low prices, lack of processing equipment’s, inadequate marketing arrangements, and high cost of processing. Wholesalers, retailers, processors and assemblers complained of in-adequate supply of soybean. The study recommends that more processors be encouraged to enter the soybean market and farmers encouraged to do value addition so as to increase their returns.