Factors influencing trader’s participation in small scale hides and skin business in the leather value chain, among non-pastoralist

Abstract

Hides and skin, the by-product from cattle and small ruminants (livestock production) forms an important business from the meat industry. Through value addition, the hides and skin are processed to leather. It is the main economic activity in both high potential, Arid and Semi-Arid regions and on small scale in other regions of Kenya. The objectives of this study were to determine the development and sustainability of the leather sector among the non-pastoralist communities. The study was carried out in Nakuru County (0.4254° S, 36.0023° E). Purposive random sampling technique of 100 respondents drawn from 10 sub-counties was used. Both primary and secondary data were used. Key informant interviews and percentiles were used to determine the challenges facing traders in the hides and skin industry. The multinomial logit model was used to determine the factors influencing the participation of the hides and skin traders in the leather sector and combination of the Gross Margin (GM) and the Endogenous Switching Regression (ESR) model to evaluate the impact of the hides and skin business to the income of traders. The main challenge that affects hides and skin traders is fluctuating prices at 56% and the lowest being poor condition of their working premise at 2%. This is a type of business that is passed on from one generation to another because most traders are middle aged or elderly (>45 years old). 35% indicated that their main reason for starting the business was family and had over 10 years’ experience. The study also showed that ownership of registered business earns more income by $18 and on the contrary a reduction of income by $54. In conclusion proper utilization of hides and skin will not only earn income to the traders but will also minimize on wastage of a useful resource which is by-product from livestock industry that supports a valuable leather industry.