Structure, conduct and performance of egg marketing between Kiambu and Nairobi

Abstract

The study investigates the functioning of the egg marketing system with special regard to the interaction between the producers in Kiambu District and the wholesalers in Nairobi. The aim was to assess the efficiency of the system. Eighty egg producers and forty rural-to-urban wholesalers were interviewed, the former on their farms and the latter in open-air markets. Use of determinants of the marketing performance structure and conduct was made in assessing the efficiency of the system. Using the number of birds at the laying stage as a proxy of level of production, the producers were stratified as follows:- i) Those with units of a - 600 layers as small-scale producers. ii) Those with units of 601 - 800 layers as medium-scale producers. iii) Those with units in excess of 800 as large-scale producers. The producer market structure was identified by the proportions of the respondents in each stratum. The Chi-square (x2) test of dependence was applied on the structural indicators to assess the influence of level of output on the choice of the market outlet by individual producers. Weekly market turn-over of each of the forty rural-to-urban wholesalers was used as a proxy for market shares. The proportion of the wholesalers in each market share size was used to draw a Lorenz Curve. By use of trapezium rule, a Cini coefficient was estimated from the resulting curve and used in assessing the market structure of the rural-to-urban egg wholesalers. Guided by concerns commonly raised on the system, a trend analysis of both producer and retail prices was carried out to assess the pricing efficiency; secondary data was used for this purpose. The results showed that scale of egg production is an important influene in the choice of market outlet. Individual producers chose their outlet according to how much they had to sell. Eighty percent of the small scale producers sold in open-air markets while the majority in the other two production scales sold their eggs directly to retailers in Nairobi or to institutions. The market concentration of buyers in the open-air markets was high. The largest 20% rural-urban wholesalers bought and resold 70% of all the eggs put on the open-air markters. By comparison, the smallest 20% bought and resold only 5% of the eggs. The assessment of pricing efficiency was constrained by data limitation. The available price series runs back for 9 years. The figures however, are in yearly averages thus limiting the amount of information contained. It was therefore not possible to estimate a reliable trend.