Indicators of Value Added Agri-Businesses on Small Farms in Kenya: An Empirical Study of Kiambu and Murang’a Counties

Abstract

Indicators of Value Added Agri-Businesses on Small Farms in Kenya: An Empirical Study of Kiambu and Murang’a Counties Dr. Joseph Franklin Ntale, Dr. Kate O. Litondo, Mr. Oscar Mapopa Mphande Abstract Kenya is ranked among the top ten largest economies in Africa and bearing the tag of middle income. This tag should motivate the country to have food security but this does not seem to be the case as many small farmers, who are the backbone of the economy, are not adding value to their agricultural produce. Adding value is an entrepreneurial process that creates wealth for both the farmers and the country. This study investigated the factors that influence value addition on small farms in Kenya. The study employed a cross-sectional survey design and a multi-stage sampling technique where 15 locations from Kiambu and Murang’a counties were identified. 388 farms were selected by line transect technique for this study. Descriptive statistics was used to estimate the extent of value addition in agribusinesses on small farms. Linear Probability Model (LPM), Logit, and Probit models were used to estimate the determinants of value addition on the small farms. The study reveals that kenya’s agrarian economy is suffering from limited value addition as the statistics show that 6% of small farmers add value to their agricultural produce. It was discovered that farm sizes are negatively correlated with value addition. The distance to the market and accessibility to loan facilities were found to be the major determinants of value addition in Kenya. The study recommended that the government should create rural markets for the farmers and facilitate financial institutions to lend money to small farmers at reasonable interest rates. Small and Micro Enterprises should be encouraged to play an active role of value addition in the agri-businesses of the Kenyan middle-income economy. Full Text: PDF DOI: 10.15640/jsbed.v2n3-4a6