Empirical Analysis of Structure and Conduct of Tomato Marketing in Loitoktok, Kajiado County, Kenya

Abstract

Tomato marketing has great potential of raising farmers and traders’ income and thereby contributing to poverty alleviation. Despite economic potential associated with tomato, producers in the study area receive low price compared to consumer price. Consequently, the cause of huge price differential is unknown. The main objective of the study was to evaluate efficiency of tomato marketing in Loitoktok, and specifically to analyze the structure and conduct of tomato marketing. A total of 174 respondents were selected; 126 producers and 48 traders using multistage sampling method. Semi structured questionnaires were used to collect data, which was analyzed using the structure-conduct-performance analysis tool. In terms of market share, Herfindahl-Hirschman indices of 0.038, 0.076, and 0.2 for retailer, wholesaler and producer levels respectively were obtained, indicating that market was competitive at retail and wholesale but uncompetitive at producer level. Gini Coefficients of 0.6505, 0.5258, and 0.4524 for producers, wholesalers and retailers were obtained showing inequity in income distribution, indicating that market was imperfect. The study did not identify clear policies on price setting nor promotional strategies. From the findings, it is recommended that market actors should have access to affordable credit to invest in tomato marketing and reduce market inequalities.