Determinants Of Choice Of Marketing Channel Intermediary For Unprocessed Tea Leaves In Kiambu County

Abstract

Agricultural market liberalization aimed to boost competitiveness in commodity markets, with Kenya's tea sector initially seen as a success story under the Kenya Tea Development Authority (KTDA). However, by the early 1990s, smallholder farmers began advocating for market reforms to gain more influence over their produce. The government responded by transforming KTDA into a marketing agent and manager of small-scale tea farmers’ factories. Despite this, the problem related to broker intermediary continues, which has resulted in theft of unprocessed tea leaves. It has also resulted in low quantities of unprocessed tea leaves being delivered to KTDA despite its efforts to supply farmers with fertilizer and extension services to small-scale tea farmers. This study investigated the determinants of the choice of marketing channel intermediary for unprocessed tea leaves in Kiambu County. Specifically, the study investigated the influences of: buyer practices, demographic characteristics, and farm characteristics on choice of marketing channel intermediary for unprocessed tea levels in Kiambu County. The study was grounded on three theories: utilizing utility theory, bulk building theory and transaction cost theory. A sample of 394 tea farmers was drawn from a target population of 25,624 tea farmers across five sub-counties: Githunguri, Gatundu North, Chania, Lari, and Gatundu South. The sample size was determined using Yamane’s formula, and data was collected using a structured questionnaire. Descriptive statistics were employed to analyze the profile of tea farmers, while inferential statistics, specifically binary logit regression analysis, were used to examine the relationship between explanatory variables and the choice of marketing channels. The findings revealed that buyer practices, including credit terms, sorting methods, and pricing, significantly influenced the choice of marketing channels. Additionally, demographic factors and farm characteristics were found to have a substantial impact on farmers' selection of unprocessed tea leaves marketing channels. Based on these results, it is recommended that the government, through the Kenya Tea Development Agency (KTDA), implement strategies tailored to address the specific needs of various demographic groups, improve buyer practices, and enhance market access for farmers. These efforts would give KTDA a competitive advantage over brokers and ultimately benefit tea farmers.