Testing market integration for Kenyan pineapples.

Abstract

In this article, we analyzed the integration of pineapple markets using the Ravallion-type model with price data collected through personal interviews with thirty-one market actors from producing and consumption markets in Kenya. The market structure was found to be oligopsonistic in nature with aspects of collusion amongst the urban middlemen and local market traders thus barring further entry by other potential actors. There was little market integration between urban markets and producing markets, and very low or no integration between the remote producing markets. Market information flow between
production and consumption markets influence integration. Highly integrated horticultural markets are likely to increase market efficiency through efficient resource allocation and price transmission which would result in lower transaction costs and increased incomes and profits to market actors. Improved marketing efficiency for fresh pineapple calls for improving integration process of the markets. We recommend deliberate efforts to promote market integration as a strategy for improving rural incomes since more incomes and profits would encourage more market actors to enter the marketing agribusiness system.

Keywords: Marketing chain, market efficiency, market integration, pineapple

Eastern Africa Journal of Rural Development Vol. 21 (1) 2005: pp. 23-33