Determinants and Impact of Smallholder Collection Action in Kenya

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• Publisher: Cuvillier Verlag
• Year: 2012
• Print ISBN: 9783954041442
• eBook ISBN: 9783736941441
• Edition: 1

SummarySmallholders face numerous constraints that keep them from taking advantage of market opportunities. Because they often live in poverty and remoteness, on less than a hectare of land with poor road and market infrastructure, they face high costs of market exchange. In order for smallholders to compete with large-scale farms and benefit from the observed and ongoing transformation of the agri-food sector, institutional solutions are necessary that address the small scale problem. One potential option is through farmer collective action. However, the existing literature has not yet sufficiently identified the explicit mechanisms and dynamics by which collective action generates benefits for men and women. In three related articles, this research investigates how farmer groups facilitate access to input and output markets by reducing transaction costs, thereby promoting intensification and commercialization of small farms. It addresses the existing research gap by analyzing determinants, participation dynamics and impacts of farmer groups, using the case of small-scale banana producers in Kenya.For the analysis cross-sectional data from 444 farm households was collected in the central highlands region of Kenya, where bananas provide an important source of food and income. Recently established farmer groups initiated by two local nongovernmental organizations (NGOs), TechnoServe and Africa Harvest, introduced institutional change in the national banana market chain. Within such groups, farmers can more easily access clean tissue culture (TC) banana planting material, get agronomic and market information, negotiate better prices and gain access to urban, high-value markets through collective selling. However, the marketing performance of these groups is unclear, and commitment varies greatly between members. Gender issues are partly left unaddressed by NGOs and group leadership. These issues pose serious threats to the groups' viability in the long run.The first chapter focuses on the determinants and impacts of smallholder organization. Farmer groups are generally inclusive of the poor, although wealthier households are more likely to join. Access to credit plays a role, as the adoption of relatively costly TC planting material is technically encouraged among group members. Distance to paved roads and mobile phone ownership facilitate participation and thus have a positive effect on the likelihood of group membership. Employing a propensity score matching method to reduce possible selection bias in impact assessment, we show positive income effects for group members. However, the magnitude of the economic benefits correlates with the mode of participation, since we find positive income effects only for members selling through the group. A considerable number of members are not participating in collective marketing. Yet, price advantages of collective marketing are small, as highvalue market potentials have not yet been tapped. Increases in income therefore stem from specialization effects and the expansion of banana plantations, facilitated by the improved access to TC planting material. In addition, group members are more likely to follow good agricultural practices in banana cultivation. Hence, beyond prices, farmer groups function as important catalysts for innovation adoption through promoting efficient information flows. In conclusion, some of the motivations for collective action do not seem to apply in the case of banana in Kenya. With significant improvements in road infrastructure, supply chains have become relatively short over the past years. Nor do farmers suffer from monopsonic power of up- and downstream actors that could render collective bargaining beneficial. In terms of price benefits, farmer collective action may thus make more sense in high-value and export markets, which are more difficult to access for individual smallholders.The fact that the magnitude of benefits from group membership is linked to the degree of participation motivates the thematic focus in the second chapter. Within farmer groups, the commitment of individual members to achieve shared objectives can vary, because the expected net benefits are not the same for all, and opportunities to free-ride exist. Since the benefits of collective action emerge primarily through the exploitation of economies of scale, and services are financed through collective marketing, low participation rates in joint activities may jeopardize the performance and viability of farmer groups. The second chapter therefore investigates commitment to collective action in terms of participation intensity and free-riding. Sequential probit and doublehurdle regression models are used to explain participation in group meetings and collective marketing. The results suggest that family labor availability and previous benefits that members received through the groups positively influence their intensity of participation in group meetings and collective marketing. There is evidence that hints at a middle size effect. That is, those with very small and very large banana plantations are less likely to participate intensively in group activities, as their cost-benefit ratio is negative. Free-riding is mostly attributed to structural and institutional conditions, such as group size and the timing of payments. Furthermore, more diversified farmers are less likely to sell collectively. Since smallholders are often highly diversified in their agricultural activities, farmer groups should also diversify their activities to include more than one crop. These findings underline that it is important to go beyond considering participation in collective action as a binary variable. Commitment is not only influenced by opportunistic behavior but also by member constraints, which contribute to lower than optimal supply of collective goods and services. The knowledge of individual behavior and constraints allows policy makers to design and implement more successful and viable forms of collective action.Based on experiences from data collection in the field, men increasingly become involved in banana production, although banana traditionally belongs to the women's sphere of control because of its importance as a semi-subsistence food crop. Although agricultural intensification and commercialization can have diverse effects on men and women, gender mainstreaming in farmer groups does not exist. The third chapter therefore investigates changes in gender relations due to group membership and related effects on household food security and nutrition. With membership in farmer groups, new economic opportunities emerge, which transform gender relations and may affect household welfare. Descriptive statistics are used to show that men increasingly become involved in banana production and revenue decisions when market and technology access improves. Controlling for possible selection bias, regression analysis suggests that dietary quality deteriorates when men seize control over revenues from banana production, although no effect on calorie supply can be observed. Finally, it is shown that female membership in farmer groups enables women to sustain their claims on banana output. Particularly the poorest women are thus able to increase their contribution to household income and strengthen their position within the household. Female membership enables women to better negotiate and sustain their claims on banana output within the family. These results emphasize the potential of farmer groups for the empowerment of women as farmers and as wives.The three chapters provide important insights into the distinct mechanisms of collective action by which benefits for smallholders emerge. In the case of staple foods, economic benefits emerge primarily through access to improved technology and information, since the motivation for market-oriented collective action may not hold as strongly as in high-value or export markets. Positive income effects in this concrete case can therefore mostly be attributed to specialization and intensification, which are important preconditions for smallholder commercialization. The binary definition of group membership used in most empirical studies may be misleading, as the costs and benefits of active participation may differ across individual members, so that different participation intensities are often observed. Knowledge of these differences allows policy makers to tackle some of the problems of farmer groups regarding market performance and viability in the longer term. Finally, farmer groups can be an important pro-poor tool for the empowerment of women. Yet, this potential has not yet been sufficiently explored by researchers and policy makers.ZusammenfassungIm Zugang zu Märkten stehen kleinbäuerliche Familien in Entwicklungsländern vor immensen Herausforderungen. Oft leben sie in Armut, müssen mit weniger als einem Hektar Land auskommen, haben kaum Anschluss an alljährlich befahrbare Straßen und leiden unter mangelndem Zugang zu Information über Märkte und verbesserte Anbaumethoden. Diese Faktoren erhöhen die Kosten des Marktaustausches und verhindern so ein profitables Wirtschaften. Wenn Kleinbauern konkurrenzfähig sein wollen, um von neuen Entwicklungen auf den Agrarmärkten zu profitieren, muss das Problem der geringen Skalenenerträge gelöst werden. Ein institutioneller Lösungsansatz hierfür ist kollektives Handeln, z.B. in Produzentengruppen, in denen Kleinbauern die nötigen Skalenvorteile erlangen, um Transaktionskosten zu reduzieren. Die Literatur hat die Mechanismen und Dynamiken aus denen die Vorteile kollektiven Handelns für Männer und Frauen hervorgehen, bisher nur unzureichend beschrieben. Daher wird hier in drei zusammenhängenden Beiträgen der Frage nachgegangen, ob und wie Produzentengruppen den Zugang zu Input- und Outputmärkten verbessern und zu einer Intensivierung und Kommerzialisierung der kleinbäuerlichen Landwirtschaft beitragen kö

Table of contents

• Summary
• Zusammenfassung
• Aknowledgements
• Table of Contents
• List of Tables
• List of Figures
• Abbreviations
• Chapter 1. Introduction
• Chapter 2. Determinants and Impacts of Farmer Collective Action2
• Chapter 3. The Determinants of Participation Intensity
• Chapter 4. Gender, Agricultural Commercialization and CollectiveAction
• Chapter 5. Conclusion
• References