Functional Diversity and Performance of Direct Marketing Outlets for Smallholder Farmers of Green Gram and Pigeon Pea Commodities in Machakos County, Kenya

ABSTRACT The smallholder direct marketing outlets (private grain traders) serve the smallholder farmers poorly in the rural areas of Kenya, making local markets thin and less competitive. The purpose of this study is to evaluate the diversity and the determinant factors influencing the private grain traders’ performance based on the volumes transacted of green gram and pigeon pea commodities. A multistage stratified random sampling procedure was employed for this study to obtain relevant information on the grain traders in Mwala and Yatta subcounties. One hundred and ten (110) grain traders were sampled in Mwala (38) and Yatta (72) subcounties. Descriptive statistics and a multiple linear regression were used during analysis. The descriptive statistics indicated that the grain traders were diverse in terms of age with majority being 31 to 40 years old, gender in trading found mainly males (54.5%), trader education status with the majority having college education (58.2%), access to credit with large group of traders not accessing (65.5%) and the distribution of the volume purchased of green gram and pigeon peas grain, which indicated high market concentration and the trader inequality. Our model for the trader purchases of green gram and pigeon pea grain was correctly described by the multiple linear regression model. The results obtained from the ANOVA indicated that the overall regression is significant, F(16, 93) = 2 632.316, p < 0.000 for the green gram purchases and F(16, 93) = 660.542, p < 0.01 for the pigeon peas purchases. Grain markets for the green gram and pigeon pea functions poorly, because few traders dominate the markets with high shares in the volumes purchased. Few traders are likely to offer low prices to the smallholder farmers of green gram and pigeon pea. There is a possibility of collusion in the market, owing to few traders in the market.