Factors Influencing Innovative Value Creation of Milled Rice by Agro Processors Within the Rice Value Chain in Mwea Irrigation Scheme

Abstract

Firms must innovate in order to enhance the value of their processes with ultimate aim of generating affordable competitive products for the market. The challenge of producing consumer products that are safe from a health viewpoint with fair price consideration has pressurized firms to comply or be edged out from the market. Despite the importance of value creation of milled rice and by-products within Mwea Irrigation scheme, it has remained relatively low and with minimal growth. This therefore necessitated the evaluation of the influencing factors in order to devise the various value creation strategies to correct the situation. The researcher took a population of 139 rice agro-processors with a sample of 72 actors (50%) of the population occasioned due to oversampling. However, 67 actors (93.05%) of the sample responded. Descriptive cross sectional survey coupled with stratified random and judgmental sampling was used in identifying the survey elements. Closed structured questionnaires devised in Likert scale were administered in data collection. The study concludes that, agro-processing firms in Mwea irrigation scheme rarely improve the value of milled rice except through polishing and blending. The researcher further find that, value of blended and polished rice is only enhanced through, branding, packaging, standardizing, promotion and advertising. Products such as fortified feeds, whole rice cookies, rice flour, rice husk briquettes, rice biscuits, and deep fried baked products are rarely done by the agro-processors. Other conclusion is that, innovative value creation activities such as packaging, branding, blending, promotion, and advertising as well as standardization marks are fairly/moderately conducted while barcoding, feed fortification, diamond mark of quality, milling of rice flour, fortification logos are never practiced. This highlights major entrepreneurial gaps available worth exploiting. Moreover, firm size and stakeholders attributes is the most significant factor influencing innovative value creation of milled rice within Mwea irrigation scheme, followed by product attractiveness, market of the value added products, resource availability, customers’ needs and expectations, corporate culture and environment, firm’s age and maturity, product demand and technology availability. The study recommends that, rice processing firms need to frequently adjust their value created products in consistence with the customers’ needs and expectations in order to create more entrepreneurial innovative opportunities. Further, capacity building with the aim of creating value creation skills, technology adjustment as well as promotion and advertising need to be emphasized. Moreover, adoption of inventory management systems to enable demand forecasting must be considered. The frequency with which market surveys are conducted must be improved so as to identify customers’ needs and expectations and also asses their product’s demand in the market. Other recommendations are such as, carrying out high promotions and advertising for the value created products in order to increase sales volume and hence general growth and improving staff skills through holding refresher training programmes for different value creation programmes. Moreover, the researcher advises on seeking alternative finance sources such as loans from banks, venture capital among others in order to meet firms finance demands and expand their value creation activities.