CAN SMALLHOLDERS CONTINUE TO EFFECTIVELY PARTICIPATE IN GLOBAL COMMODITY CHAINS? THE CASE OF FRENCH BEAN PRODUCTION IN KIRINYAGA REGION OF KENYA

Abstract

The participation of smallholders in global commodity chains such as export horticulture has often been characterised as problematic given the high transaction costs that these farmers face. The involvement of small holders in Kenya’s export sector has therefore been hailed as an exception rather than the rule success story especially given the fact that it has developed largely under the private sector. However, changes in certain standards in export markets such food  safety standards have posed a threat to these farmers’ participation. For example, there is increasing evidence that exporters of fresh produce prefer to work with larger farmers or even engage in production rather than work with small farmers. If smallholders are going to continue participating in export horticulture value chains, they will have to among other things develop and participate in institutional arrangements that reduce the increasing transaction costs brought about by international food safety standards. This study aims to describe the various institutional arrangements that small farmers use to participate in export horticulture and the challenges and constraints they face within these arrangements. In addition, it will determine factors that affect farmers’ choice of alternative institutional arrangements that exist. A survey of 240 farmers was carried out in Kirinyaga to obtain household data and 4 focus group discussions were held in each of the four districts in Kirinyaga. The case study methodology was used to gather in-depth information on the key institutional arrangements used by farmers. The study found that the most dominant institutional arrangements were selling individually to brokers, followed by selling as part of a group to an exporter. Some farmers were involved in more than one arrangement perhaps as a strategy to overcome the inherent disadvantages found in some arrangements.