Assessment of structure and performance of cattle markets in western Kenya

Abstract

Cattle markets play a major role in economic empowerment among cattle-keeping communities in developing countries. The objective of this study was to assess the structure and performance of selected cattle markets in western Kenya. Data was collected using a semi-structured questionnaire administered to livestock traders who visited markets and by conducting focus group interviews. Data was collected on availability of market information, price setting behavior, marketing costs, practices of traders on livestock movements, sources of working capital, and characteristic of respondents. A total of 252 questionnaires and six focus group discussions were conducted for the study. Cattle market concentration indices were analyzed by calculation of Gini coefficient and plotting of Lorenz curves. Additionally, gross marketing margins were calculated to evaluate market performance. The results from this study showed a positive marketing margin in study markets for all cattle categories, the relatively high Gini coefficient of 0.65, and Lorenz curves revealing that in some markets 20% of traders control about 48% of the market share which is an indication of high market concentration. The high Gini coefficient and positive marketing margin obtained imply that study markets were highly concentrated but profitable which is an indication of inequality in the markets. The main barriers to entry in these livestock markets included lack of adequate market information, high operational capital requirements, and high costs of transporting animals. In conclusion, cattle marketing within western Kenya is profitable. However, the high concentration index in markets and presence of entry barriers including lack of flow of information on sources of livestock for trade, mechanism of price setting within markets' high capital outlay, may encourage poor trade practices which may compromise biosecurity standards within markets, and hence necessitating increased risk for spread of livestock diseases and even zoonoses to connected farms and systems.