Fertilizer Markets and Agricultural Production Incentives - Tegemeo ...

detailed calculation of transport running costs and a breakdown of the components of
transportation costs).
The second tier of transporters are small transporters. Whereas large transporters charge on a per
ton per km basis, travel on average 500 km, carry large loads, and travel on better roads, small
transporters charge per bag, carry smaller loads, and travel shorter distances (on average 20 km)
on poorer roads. They operate vehicles with a capacity of up to 16 tons and are the main form of
fertilizer transportation within districts in Western Kenya. Small transporters typically own 1 or
2 vehicles, which vary in type from 1-16 ton canters or small trucks, pick-ups, matatus and
finally, bicycles or “boda-bodas”. The canters and pick-ups are normally used to transport
fertilizer from wholesalers to retailers, whereas the matatus are hired by farmers to transport the
fertilizer from the retailer to drop-off points at varying distances from the farmgate. The
remaining distances - ranging from a few hundred meters to several kilometers - are either
covered on foot, or by boda-boda, i.e. bicycle traders that carry up to two 50kg bags at a time. 4
Although two of the importers ship their landed fertilizer directly from Mombasa to their
godowns and/or to customers upcountry, the majority of the wholesalers in cities and towns
upcountry (such as Kitale, Eldoret, Webuye, Moi’s Bridge, and Matunda) receive their fertilizer
from importers’ godowns in Nairobi.
5. EMPIRICAL ANALYSIS OF THE COMPETITIVENESS OF MARKETING
CHANNELS
A variety of marketing channels existed in the fertilizer subsector in 1999. A particular type of
trader often purchased fertilizer from two or three different types of suppliers and sold it to two
or three types of buyers. Figure 6 provides a graphical illustration of the different types of
suppliers and buyers that existed for each type of trader in 1999. The channels differed in terms
of their length (number of stages) and breadth (number of traders at the same stage of each
channel) which has implications for the competitiveness of the channels.
Moreover, all the wholesalers sampled performed a dual function of retailing directly to farmers,
in addition to selling to retailers. Therefore, retailers who purchased their fertilizer from
wholesalers had to compete with these same wholesalers in the retail market. Presumably,
4 The boda-bodas go where matatus will not go due to the bad condition of the road. Therefore, whether a
road is serviced by a matatu and boda-boda, or by boda-boda only is a measure of the quality of the road.
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