Factors affecting market output of small scale suppliers of Kenya Tea Development Agency : a case of suppliers of Kathangariri factory

Abstract

The agricultural sector directly contributes 26% of the Gross Domestic product and accounts for 60% of total export earnings (G.O.K, 2006). Hence, agricultural growth and development is crucial to Kenya's overall economic and social development. KTDA is one of the largest tea producing, processing and marketing companies in the world. The researcher sought to investigate the factors affecting market output of small scale tea suppliers of KTDA.This is because there has been an outcry by the small scale tea suppliers, concerning the tea production and eventual market output, despite all the support given by KTDA, the government and other key players and in spite favorable geographical and climatic factors. A survey of 71 small scale tea suppliers of Kathangariri was carried out in Embu, within a target population of 6912 farmers registered to supply tea to the KTDA managed Kathangariri tea factory. Questionnaires and interviews were administered to the small scale tea suppliers. The study was to answer vital questions such as: What are the factors affecting market output from tea production of small scale tea suppliers of Kathangariri tea factory? Does land tenure affect the tea production and market output of small tea suppliers of Kathangariri factory? To what extent does the cost of production affect market output of small scale tea suppliers of Kathangariri factory? Do government regulatory policies affect market output of small scale tea suppliers of Kathangariri factory? Do price and tea factory operations affect market output of small scale tea suppliers of Kathangariri factory? A descriptive research design was used. Multistage random sampling technique with an aspect of stratified sampling technique was used to establish the sampling technique. Primary data collected by administering questionnaires to the small scale tea suppliers was analyzed using descriptive statistics with the help of Excel software. Secondary data on the subject was also consulted and analyzed and interpretations made. Inferences were made and presented descriptively using bar charts, pie charts, frequency tables and percentages. The research findings were expected to open up avenues for KTDA, the Government of Kenya, the Tea Board of Kenya, TRF of Kenya to rethink the marketing and corporate strategies and policies to be put in place geared towards streamlining production and eventual market output of small scale tea suppliers of KTDA.It was established that land tenure and ownership, regulatory government policies and support services, cost of production and the price of tea in the world market are factors that affect market output of small scale tea suppliers. Land subdivision and acreage of the small scale tea suppliers have an influence on the market output. Government policies on input credit, infrastructure management, market research and training have an influence on market output. The market price and pricing policies were found to have an influence on market output of the small scale tea suppliers. The study established that the cost of production was affected by tea transportation, farmers' education, price of inputs and labor costs and the total cost of production affects the market output. The study recommends that clear government policies should be spelt out by the government on land tenure, subsidies for the small scale tea suppliers and regulatory and support services should be revised and enhanced to improve the market output.Further,involvement and participation of the farmer on the policy formulation should be addressed.