Effects of Vertical Market Linkages on the Commercialization of African Leafy Vegetables in Bungoma County, Kenya

Abstract

Smallholder African Leafy Vegetables (ALV) farmers face numerous challenges in accessing output markets, resulting in low levels of ALV commercialization. Among other challenges, are transaction uncertainties, limited access to market information, and high transaction costs such as the cost of searching, bargaining, and market monitoring that hinder the commercialization of ALVs among smallholder farmers. To be competitive in the commercialization of ALVs, there is need for vertical market linkages to be incorporated between African Leafy Vegetables (ALVs) producers and other market actors. Therefore, this study aimed to contribute to improved livelihoods among ALV producers in Kenya by evaluating the effect of vertical market linkages on the commercialization of ALVs. Multistage sampling was used to select 384 respondents in Kimili and Kabuchai sub-counties in Bungoma County. Through a cross-sectional survey, data was collected using a semi-structured questionnaire. The results of the study revealed that smallholder ALV farmers largely participate in producer-to-final consumer vertical market linkage and producer to retailers vertical market linkages at 98.7% and 91.7% levels respectively. Results from the fractional regression revealed that the factors that significantly influenced the commercialization of ALVs among smallholder farmers were, the education level of the farmers, land size, distance to the markets, ALV yields, ALV cost of production, average price and the value-added. The Multinomial Endogenous Switching Regression model revealed that none of the smallholder ALV farmers participates in a single vertical market linkage, instead, they participate in seven (7) different combinations of vertical market linkages. The model further revealed that the highest commercialization is achieved when smallholder ALV farmers participate in producer-processor and producer-final consumer linkages both for the treated and the counterfactual scenarios. The study recommends increasing linkages by considering payment methods that favor farmers and formalizing the relationships between smallholder ALV farmers and processors to maintain a steady demand and ensure the realization of better prices for the ALVs produced. Building the capacity of smallholder farmers to understand the business-related benefits associated with the different combinations of vertical market linkages is critical to enabling g smallholders to increase their involvement in ALV commercialization. Prioritizing interventions and policies that facilitate vertical market linkages through capacity and infrastructure development, market information dissemination and formalization of relationships can further promote the development of vertical market linkages among smallholder farmers.