Post Liberalization Marketing of Tea Leaf in Kenya
Market Concentration, Price Spread and Conduct Analyses
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The liberalization of smallholder tea sector in Kenya was carried out with the aim of replacing a vertically integrated production- marketing system of providing services to farmers by a broad system run by different institutions. Structure, Conduct and Performance framework was used to describe the structure of the market after liberalization. The results indicate that smallholder tea farmers have more channels for their produce after liberalization. The concentration ratios of four and eight largest farmers were 0.27 and 0.41 indicating low to moderate concentration which closely approximate...
The liberalization of smallholder tea sector in Kenya was carried out with the aim of replacing a vertically integrated production- marketing system of providing services to farmers by a broad system run by different institutions. Structure, Conduct and Performance framework was used to describe the structure of the market after liberalization. The results indicate that smallholder tea farmers have more channels for their produce after liberalization. The concentration ratios of four and eight largest farmers were 0.27 and 0.41 indicating low to moderate concentration which closely approximates the requirements of a purely competitive market structure. Kenya Tea Development Agency (KTDAg) was the most preferred channel by 46.9 % of the respondents due to high bonus prices. KTDAg prices were higher than those of non- KTDAg channels. There was no significant difference in marketing costs incurred in KTDAg and non KTDAg channels. The book recommends improved post-harvest handling ofthe produce and efficiency in collection and transport. This book is useful to all stakeholders in the tea sub-sector in Kenya, policy makers, agricultural marketing and economic students and professionals
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