Nile Perch Pricing in Mfangano Island of Lake Victoria, Kenya.

Abstract

One of the causes of excessive depletion of natural resources is their low price at the production level. The Nile perch continues to face depletion in its natural stock and is in this category of natural resources with low prices. However, the price benefits largely accrue to traders and buyer agents, and not the fishermen. Only a fraction of the traders appreciates the use of weighing scale as an accurate measure to the value of Nile perch weight. The fish is therefore valued on guesswork, depending on size and general appearance. The study explores the interaction between the parties, a factor ignored but largely determines the price of Nile perch. The fish processors and agents determine their pricing based on several economic and social factors. It is not clear how fishermen get raw price deals from agents and not the other way round. The main objective of this study was to analyze the interaction of players and identify the type of games between fishermen on one side, and buyers/agents on the other. Primary data was obtained from 144 respondents: fishermen, agents, traders and end user buyers from 11 landing sites in Mfangano island of Lake Victoria. The research findings indicated that prices negotiated and paid are largely determined by possession of market information, age of respondent, size, quality and negotiations between parties. The negotiations in Nile perch prices took the form of ultimatum games, where both parties stood to lose if they failed to reach an agreement and share a pie from the processor’s price offer. The findings also indicated the stake of fishermen in price determination is largely limited by beach management units that set a price floor for fresh, high quality Nile perch. The study recommends setting of price floors by the fisheries regulatory bodies to protect parties from exploitation arising from information asymmetry and unstandardized units of measurement.