The Future of Smallholder Farming in Eastern Africa - Uganda ...

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Table 23--Job status of traders Type of trader Number of full-time traders Number of part-time traders Retailers (open air) 42 12 Wholesalers (open air) 20 3 Wholesalers (stall/stores) 43 14 Posho millers 25 8 Bicycle traders 17 5 Lorry traders 7 4 Long-distance transporter 17 3 Large-scale miller 5 0 Others 7 2 Total 183 51 Source: Authors’ survey, 2001. In addition to the cost of purchasing maize, traders incur other marketing costs. These include transport costs, storage costs, loading and unloading costs, license and market fees, bribes to licensing and police officers, security fees, and costs of packaging materials. Long-distance maize traders also incur boarding and lodging fees. Each of the identified cost categories presents an opportunity for a closer look at how to reduce marketing costs. 3.4.1 Transport Costs Few of the traders interviewed own means of transport. The main reasons cited for not having their own means of transport are lack of sufficient starting capital and the high risk and costs involved in operating owned vehicles. In the rural areas intermediate means of transport (such as donkeys and bicycles) are important in transporting maize from the farms to the nearest marketplaces. Traders pay approximately Ksh.4.40 on average to transport one bag of maize per kilometer on all-weather roads, compared with Ksh.7.60 on dry-weather roads. There is thus a need to improve roads from dry- to all-weather in order to reduce maize transport costs, thereby raising producer prices and lowering prices to consumers. 3.4.2 Storage Costs Survey results reveal that the majority of the traders (about 78 percent) store maize for a period of 1-4 months. On average, storage costs were estimated to be about Ksh. 30 per bag per month, equivalent to between 2 and 7.5 percent of the farm gate price. Traders usually maintain a rapid turnover because of lack of storage facilities, high risks of produce theft and quality deterioration, together with uncertainty regarding government policy, fluctuations in selling prices, high costs of pesticides, and inadequate working capital to finance stockholding. The strict conditions and quality standards set by the NCPB also act as a further disincentive. Some of the conditions set by the board include limiting the moisture content to less than 13 percent and requiring an upper limit of not more than 1 percent foreign matter, 1 percent broken matter, and 2 percent rotten, diseased, and discolored grains. Alleviating storage constraints could reduce storage costs and enhance temporal arbitrage. 3.4.3 Loading and Offloading Costs Average loading costs at the various maize markets were very similar, ranging between Ksh. 8 and 12 per 90 kg bag. Modal loading costs in each market were Ksh. 10 per bag, but a few small-scale traders were paying below-average rates as low as Ksh. 5 per bag. Loading and offloading was by human labor, and little mechanization was observed.
3.4.4 License and Market Fees According to the commercial law of Kenya, all traders are required to obtain a trading license. Depending on the volume of trade, the fee paid ranges from Ksh. 500 per year for very small-scale traders to Ksh. 100,000 per year for very large-scale maize millers and processors. Marketplaces administered by the local governments normally charge a daily flat rate market entrance fee. This fee ranges between Kshs. 10 and 20 depending on the respective local government rates. 3.4.5 Bribes In December 1993 virtually all restrictions on interregional maize trade were lifted, but police roadblocks remained. Traders still need to obtain a trading license, but this requirement has been loosely enforced, and most traders continue to operate without trading licenses. During the field survey for this study, the study team interviewed 13 traders who admitted having paid bribes to police officers. These bribes ranged from Ksh. 500 to 3,600. The bribe depends on the number of bags being transported. Other traders also reported having paid bribes to licensing officers. Bribes to licensing officers ranged from Kshs.100 to 3,000. The existence of this rent-seeking behavior points to cumbersome licensing procedures and unclear requirements. Enforcing zero tolerance of corruption will guarantee elimination of this marketing cost. 3.4.6 Other Marketing Costs Maize traders also incur costs of packaging materials (usually jute and polypropylene gunny bags), which normally cost between Ksh. 20 and 30 per bag. Security fees and boarding and lodging fees are additional costs incurred, especially by long-distance maize traders. Boarding and lodging costs could be reduced through improved market transparency and contract enforcement laws that would allow for flow of products without the need for physical inspection. 4.0 CONCLUSIONS AND POLICY RECOMMENDATIONS 4.1 Conclusions The major objective of this study was to analyze the efficiency of the maize marketing system and determine how its efficiency has been affected by liberalization. To this end, we carried out an analysis of market integration among spatially separated markets, both in the pre- and postliberalization eras, using a number of techniques. An important goal of market liberalization and the opening of maize markets to private traders was to increase market efficiency by reducing marketing costs and spatial and temporal price differentials. We investigated this issue by considering changes in price spreads and volatility and the level of marketing costs. Finally we considered the effect of infrastructure and government actions on market efficiency. The results show that the liberalization policy has enhanced market efficiency as measured through market integration and that there are potential opportunities for arbitrage between maize surplus and deficit regions. Liberalization has also led to the development of central markets (Nairobi in the consumption zone and Kitale in the production zone), indicating movement toward a more organized marketing system. The arbitrage opportunities brought about by liberalization will, however, remain largely unexploited because of infrastructural, institutional, and policy constraints that hinder the development of a private sector that could perform the functions hitherto performed by government agencies. These constraints include:
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Part One - Agricultural Productivit
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I. Introduction Agricultural Produc
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came about from expansion of cultiv
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study, therefore, limited itself to
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Land allocation and yields of 12 cr
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Table 6: Key economic variables for
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local seed in absolute terms and th
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Table 11: Crosscutting priority con
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Table 13: General constraints to ma
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These results clearly demonstrate t
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Table 18: Crosscutting constraints
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V. Policy Implications The findings
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References Appleton, Simon (2001).
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1.0 BACKGROUND 1.1 Introduction Low
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egins with a summary of the literat
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Source: National Wetlands Conservat
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shillings (§37-38). Every landowne
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Similarly, Howard (1995) used socia
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Uganda may well have more than a qu
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factors that explain household leve
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of inputs 18 , pests and diseases,
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(PMA p. 27). It also requires impro
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agriculturalists, who still do not
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to have covered 30,000 ha. During t
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4.0 RESEARCH METHODOLOGY The breadt
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• What is the current extent of w
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Figure 2. Changes in Sources of Com
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Figure 5. Proportion of Households
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estimates are remarkably consistent
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FSI - Percentage by District Distri
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was corrected using the White-Huber
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utilization for the household. Howe
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The nature of the structures to con
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impact of irrigation on horticultur
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growing population. Wetland protect
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APPENDICES Appendix 1. The Wetlands
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Appendix 2. THE 5V’s PRIORITY CLA
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Appendix 5. Determinants of Product
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Estimated covariances = 79 Number o
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International Food Policy Research
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Scherr, Sara J., 1999b. Poverty-env
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Land Tenure, Agricultural Productiv
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1.3 Statement of the problem Land s
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In order to achieve these objective
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densely populated Nyeri and Kakameg
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Figure 3: Conceptual Model Type of
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Figure 4: Location of the Study Dis
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By 2001, land demarcation and regis
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3.4 Survey Design The survey was un
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3.5.3 Model of Environmental Degrad
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questionnaire (Figure 8). Prominent
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Figure 10: Availability of hired la
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Figure 13 shows the level of cultiv
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joint significance test on the 4 dr
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Table 8: Regression Results on Maiz
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was classified into three categorie
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Table 9: Tobit Analysis with Enviro
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5.0 CONCLUSIONS AND POLICY IMPLICAT
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5.5 Access to Market A number of fa
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FAO (2003b). “Women and Food Secu
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Omiti John and Paul Obunde (2002).
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Annex 1: Pearson Correlation Coeffi
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SEXHH SEXLUSER TSECUR VEGCP1 CHILDE
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Part two - Agricultural Markets
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Market Liberalisation and Agricultu
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farms show annual fluctuations, wit
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Figure 2: Recent trends in domestic
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5. The Model The interest of this s
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sources for each sector. α IM ji a
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Savings Households’ savings are a
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The value-added price is defined th
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Specifically, the Government polici
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Table 5: Calculated Tariff Rates (%
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disincentive to farmers. Inability
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competitiveness. The second one is
Page 151 and 152: Table 7: Wage Rates and Labour Inco
Page 153 and 154: Similar simulation is undertaken in
Page 155 and 156: References Block, S. and C.P. Timme
Page 157 and 158: Tyler, G. J. and Akinboade, O. 1992
Page 159 and 160: (A.10) ai ∑ P ϖ P i=1,...,3; j =
Page 161 and 162: (A.32) price (A.33) P Q = P ( 1+ td
Page 163 and 164: Table A.2: Variables of KEGEM Varia
Page 165 and 166: VA A i Efficiency parameter in valu
Page 167 and 168: CHAPTER FIVE Post-Liberalization Ma
Page 169 and 170: As alluded to earlier, initial agri
Page 171 and 172: directly to dairy farmers as animal
Page 173 and 174: to engage in this new role, the gov
Page 175 and 176: 2.0 RESEARCH METHODOLOGY 2.1 Overal
Page 177 and 178: markets with minor gaps in data ser
Page 179 and 180: Price-series correlations are conve
Page 181 and 182: Migori Awendo Postliberalization 1,
Page 183 and 184: model depends on whether or not the
Page 185 and 186: Table 6b--Unit root tests for price
Page 187 and 188: Table 8a--Unit root tests for OLS r
Page 189 and 190: 3.3 The Role of Infrastructure and
Page 191 and 192: Table 13--Reported distances from t
Page 193 and 194: Table 15--Reported maize storage pr
Page 195 and 196: Table 17--Traders’ perception of
Page 197 and 198: 3.3.6.2 Awareness of the Liberaliza
Page 199 and 200: Retailer (open-air market) 21 13 7
Page 201: 3.4 Maize Marketing Costs Traders w
Page 205 and 206: 5.Develop farmers’ and traders’
Page 207 and 208: Coulter, J., and J. A. F. Compton.
Page 209 and 210: Meilink, A. H. 1987. Food consumpti
Page 211 and 212: Figure 1 Maize surplus and deficit
Page 213 and 214: Figure 3 Trends in Maize Prices 199
Page 215 and 216: Price per 90kg bag (Kshs) Mbeere Di
Page 217 and 218: Figure 4 Modes of transporting maiz
Page 219 and 220: Figure 6: Limitations to storage ca
Page 221 and 222: Figure 8: Problems experienced in a
Page 223 and 224: CHAPTER SIX Grain Marketing in Addi
Page 225 and 226: A third, related explanation argues
Page 227 and 228: educed marketing costs related to p
Page 229 and 230: 1.4. Research questions This study
Page 231 and 232: 1.6. Organization of the report Thi
Page 233 and 234: the cases, respectively (Table 2.4)
Page 235 and 236: Brokers believe that most regional
Page 237 and 238: There is also a close relationship
Page 239 and 240: Table 2.14: Buyers’ methods for i
Page 241 and 242: Source: Survey, 2002. Table 2.18: D
Page 243 and 244: Table 2.22: Method used to grade di
Page 245 and 246: Table 2.25: Access to credit broker
Page 247 and 248: It has been reported that grain pur
Page 249 and 250: 3. GRAIN RETAILERS Retailers serve
Page 251 and 252: Like brokers, retailers use cash or
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Table 3.11: Buyers’ information a
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Table 3.14: Retailers’ views of g
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Getting reliable price information
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Table 4.4: How do you set a sales p
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Table 4.7: Means of settling disput
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a.m. The survey included wholesale
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Table 5.3: Instability index of dai
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Table 5.7: Seasonality index of who
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Figure 5.3: Ratio of wholesale to r
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Table 5.8: Results of stationary te
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Table 5.10: Summary of Granger caus
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holiday sales. The results of the r
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Table 6.1: Storage capacity of the
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Intermarket grain flow is coordinat
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• a legal, regulatory, and enforc
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REFERENCES Al-Hassen, R., A. Dorwar
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Seppala, P. 1998. Decisive liberali
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achieve some welfare objective. The
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Annex Table 2.10: Have you faced di
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Annex Table 2.21: Do you consider p
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Annex Table 3.3: Cost structure of
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Annex Table 4.2: Complementary acti
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CHAPTER SEVEN Post-Harvest Grain Ma
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only (see Abebe 2000: 80-83). That
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of processing as an important post-
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occur at all stages of post-harvest
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Endowment & access to Resources (e.
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Figure 2: The Study Areas (shaded a
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(6) β i = β 0 λ i , 0
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Intercrop differences Liquidity con
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eplace old animals (19 percent of h
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Table 5. Number and capacity of gra
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Table 7b.Estimated grain loss durin
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7.1.3. Grain Marketing Practices an
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1.8 Producers' price 1.6 1.4 1.2 1
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next season, grain prices tend to b
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Table 13: Regression results (Tobit
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of grain production was reportedly
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instruments to mitigate price risks
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Coulter, J. and G. Onumah, (2002).
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Appendix: Supplementary Tables Appe
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CHAPTER EIGHT Collective Action in
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The objectives of DRS were to popul
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increasing participation. Thus, the
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Table 2. Perceived change in benefi
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unsatisfactory (Table 8). Flaws in
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Table 14. Measures of wealth status
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Results from Regression Analysis Ta
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However, to maintain these benefits
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Table 18. Determinants of participa
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_______ 1981. Common property and c
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Management Regulations and Enforcem
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In theory, under PFM, the governmen
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3.2 Desk study The desk study invol
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Table 1: Number and gender of indiv
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Poverty Increase in number of fishe
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Table 5: Responses given by various
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wages after the catch is sold (see
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70 60 No of respondents 50 40 30 20
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4.2.3 Lack of attention to social i
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5.3 Regulate the construction of re
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REFERENCES Allison, E. H., and P. M
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APPENDIXES Appendix A: Districts of
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Questions and responses Government
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Questions and responses Lack of coo
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CHAPTER TEN Animal Health Service D
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• Individuals are selected for tr
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Makueni district was selected becau
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1.5 Justification of the study The
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more sustainable (Leonard 1993; Uma
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of defined roles for CBAHWs within
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Interviews with veterinary officers
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The estimated model was of the form
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Gender remains a sensitive issue. P
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The most common ailments and diseas
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4.3 Factors influencing the level o
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Table 9 -- Factors influencing the
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Table 10 - Factors determining the
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Table 12 -- Current mean numbers of
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Figure 4: Percentage of household h
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CBAHWs were the most utilized chann
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Users of veterinarians’ services
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Table 18 -- Levels of incomes and l
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higher average calving per cow, whi
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Table 21 -- CBAHWs’ ranking of sp
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epresentative of livestock keepers
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Despite the restriction imposed by
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veterinarians. Such associations co
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References Akabwai, D., V. Shean, a
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Johnson, P. J., and C. Chahuares. 1
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Appendix 1: The Logistic Procedure
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Social Capital and Sustainable Agri
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1.1 Soil conservation programs and
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1.3 Research Objectives and Hypothe
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Institutional and Policy factors -
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land pressure is high (Holden 1991)
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include density of membership in gr
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then summed up according to increas
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Social capital, resource use, and a
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Table 4.4 Farmers’ perception of
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Table 4.5: Empowerment and politica
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Table 4.8: Indicators of collective
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Table 4.10: Comparison of means of
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5. The influence of social capital
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especially when considered on an ad
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households may pay less attention t
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Table 5.3 Determinants of terracing
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and Gichuki 1994). In the 1940s, th
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Table 5.4. Determinants of soil con
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5.3. Social capital, resource use,
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6. Implications for policy and prog
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essential for the formation of exte
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BIBLIOGRPAHY Admassie, Y., L. I. Mw
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Gambetta, D. 1988. Can we trust tru
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Social capital and watershed develo
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Obare, G. A., S. W. Omamo, and J. C
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Washington D.C.: The World Bank Tem
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Appendix: A list of Contributors Ab
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Appendix: Projects Supported Under
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IFPRI Eastern Africa Food Policy Ne
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