Adoption of banana value addition and its effect on profitability of small-scale agri-enterprises in Kisii County, Kenya

Abstract

Value addition in the banana value chain has become an important opportunity especially the time of high postharvest losses. The strategy prolongs and improves the shelf life and quality of banana fruit hence increasing agripreneurs’ profits. Despite this documented benefits, adoption of banana value addition has remained low globally. This study sought to determine the adoption of banana value addition and evaluate its effects on profitability in Kisii County, Kenya. The specific objectives were: (i) To characterize adopters and non-adopters of value addition among small-scale banana agripreneurs in Kisii County (ii) To examine the factors influencing adoption of banana value addition among small-scale agripreneurs in Kisii County (iii) To evaluate the effect of adoption of banana value addition on profitability among small-scale banana agri-enterprises in Kisii County. The study used pre-tested semi-structured questionnaire to collect cross-sectional primary data from 201 agripreneurs selected using mult-stage sampling technique in Kisii County, Kenya. Descriptive analysis, Cragg’s double hurdle and propensity score matching approach was used to analyse objective one, two and three respectively. Descriptive statistics indicated that flour milling was the most adopted value addition activity followed by slicing and drying, sorting and grading and finally crisps making. Chi-square and t-test results revealed that significant differences between adopters and non-adopters were observed in extension contacts, trainings received, type of road, primary occupation, age, group membership, distance to the output market, output produced, and farm size. Moreover, double hurdle model summarized that output produced, primary occupation, use of murram roads, number of trainings and extension visists, distance to output market, and group membership had a significant effect on decision to adopt banana value addition. While access to credit, use of tarmac roads, output produced, farming experience, number of extension visits, and marital status had a significant effect on extent of adoption of banana value addition. Finally, findings revealed that adoption of banana value addition has a positive significant effect on profitability. Adopters increased their profits by KES 45,510.72 per acre. There is need for the public and private agricultural extension organizations to provide more trainings and extension services to agripreneurs. The County government and development organizations should sensitize agripreneurs to form groups and cooperatives to enhance working collectively in production, processing and marketing of bananas and its value-added products. The County government should invest more funds on developing rural roads to improve access of markets among agripreneurs. All these enhance adoption of banana value addition