Honey market structure and pricing efficiency in the pastoral areas of Baringo District, Kenya

Abstract

A competitive market structure is a sufficient condition for the market pncmg efficiency. This in turn ensures that price provides producers with the incentives to enhance production depending on available resources. The main objective of this study was to examine the structure of the honey market in the pastoral areas of Baringo in order to characterize its competitiveness and the pricing efficiency resulting there from. Observ-ations, informal interviews and a honey traders' survey in Chepkelacha, , Nginyang, Loruk, Kokwototo, Tangulbei, Kolloa and Yatya markets, and Marigat town, identified the categories of traders involved in honey trade as wholesalers who mainly purchased and sold honey in bulk, wholesalers-cum retailers who purchased and sold honey in bulk and occasionally, in small quantities to consumers and retailers who sold honey to consumers in small quantities. The findings showed that the honey market in the pastoral areas of Baringo had about ten equally sized traders who were dealing in a homogeneous product, honey. Poor infrastructure was identified as one of the major barrier to enter honey trade. The commodity was sold. Honey traders colluded to influence the price at which they purchased honey from beekeepers by easily sharing marketing information. Although competition for honey among the traders was noted to be intense, one trader was identified as dominant, controlling the largest market share. These findings showed that the honey market structure in the pastoral areas of Baringo was of an organised collusive oligopsony form. Honey marketing costs were found to be high at sixty four per cent of the mean gross marketing margins. Personal travel was found to contribute the largest proportion of the marketing costs at thirty eight per cent followed by brokers' fees at twenty seven per cent. Both the honey transport and packaging costs contributed twelve per cent of the total marketing cost. The pricing efficiency of the honey market was found to be low at thirty three per cent with wholesalers-cum retailers recording the least pricing efficiency compared to the other two categories of traders. The study recommends the promotion collective action among beekeepers to enhance honey market competitiveness; training of honey traders so as to enhance specialization; increasing vertical integration between beekeepers and high end markets; development of a honey market information system that provides up to date price information at the market place to both bee keepers and traders; and studies on the marketing of other beekeeping products such as beeswax, propolis and bee venom.