Spatial Pricing Efficiency and Regional Market Integration of Cross-Border Bean (shape Phaseolus Vulgaris L.) Marketing in East Africa: The Case of Western Kenya and Eastern Uganda

Abstract

Common bean is an important legume crop in East and Central Africa, providing protein, calories and cash income for rural households. Smallholder farmers in Kenya and Uganda have adopted improved bean varieties. However, the demand for common bean in Kenyan market far outstrips local supply and the country is a net importer from Uganda and Tanzania. In the recent years Kenya’s bean production has been declining mainly due to bad weather conditions, soil fertility decline, pests and diseases and poor pricing policies. An efficient bean marketing system enhances food security. The objectives of this study were to investigate the price variations between rural markets and urban markets in relation to marketing costs and assess the regional market integration in the bean marketing system. It was hypothesized that price differences between any pair of trading markets are explained by transfer costs. Purposive, multistage and systematic random sampling methods were used to select the study districts, bean farmers and bean traders respectively. Two hundred and ten respondents were interviewed using structured questionnaires. Descriptive statistics were used to analyse the data. The Statistical Package for Social Scientists (SPSS) was used to generate the Pearson’s bivariate Correlation coefficients. The study revealed high price differentials between rural and urban markets which were more than accounted for by transfer costs. The results further revealed that there is inefficient pricing mechanism among spatially separated markets in the study area. Correlation coefficients analysis of wholesale bean prices revealed that regional bean markets in the study area are integrated