Abstract:
In Kenya horticulture contributes greatly to the economy and particularly nuts play a
crucial role in income generation with macadamia production been ranked among the
top enterprises. The crop leads to job creation and acts as an income incentive to
smallholder farmers. Despite its potential in the Kenyan economy, macadamia
production has not been fully exploited resulting from a weak link between extension
and farmers. This has occasionally translated to low market efficiency, farmers
participating in low rewarding channels and farmers producing low yield. The study
provides insight on market efficiency, choice of marketing channel and quantity of
macadamia supplied to the market. The study was guided by three objectives; to assess
selected institutional and socio-economic factors that affect market efficiency, to
determine selected market and socio-economic factors that influence participation in
various marketing channels and to assess socio-economic factors that affect the quantity
of macadamia supplied to the market. The study provides information on most
profitable marketing channels available to farmers. Data used in the study was collected
using a structured questionnaire from 337 smallholder macadamia farmers who were
selected randomly in Embu West Sub-County using stratified multistage random
sampling technique. The study was guided by the Supply theory and Random Utility
theory to explain how farmers made decision to participate in a channel and supply
macadamia. A cross sectional survey design was adopted in the study. In assessing the
institutional and socio-economic factors that affect market efficiency, the study adopted
the stochastic frontier production function analysis. In determining selected market and
socio-economic factors that influence choice of a marketing channel the study used the
multinomial logit regression model and to assess the socio-economic factors that
influence the quantity of macadamia supplied to the market the study adopted the
multivariate multiple regression model. The findings revealed that the mean of market
efficiency was 8.15 %, broker channel 48.1% was the most preferred channel and
farmers supplied an average of 128.37 kilograms. The findings of this study provide
information to sectors involved and policy makers and recommends on the need to put
feasible strategies such as increasing extension and setting more collection centers for
profitable channels to enable farmers fetch higher returns from macadamia farming.
