Raising offtake from cattle grazed on natural rangelands in sub‐Saharan Africa: a transaction cost economics approach

Abstract

Farmers in sub-Saharan Africa are constrained by large transaction costs associated with marketing of their livestock. However, transaction costs are often not taken into account in the analysis of factors hampering the development of livestock marketing in this region. This article empirically measures the influence of transaction costs on the offtake from cattle grazed on natural rangelands in Uganda. The study is based on the monitoring of 696 cattle transactions in three districts of Uganda from August 2004 to August 2005. The estimated models suggest that proportional transaction costs represented by the state of roads, distance to markets, and time taken to reach the market are important variables constraining market participation. In order to raise offtake from the national herd, it is essential to explicitly address these costs. One potential solution is collective action in marketing of livestock in which proportional and fixed transaction costs are reduced and shared among the group members. Copyright (c) 2008 International Association of Agricultural Economists.

Pastoralism, sustainability, and marketing. A review

“…Besides contributing to ecological sustainability, marketing therefore potentially decreases poverty among pastoralists and may help to improve the fair distribution of rents in the channel. The pastoralist literature has in that respect acknowledged that improving marketing skills may increase the competitiveness of pastoralists (Hatfield and Davies 2006;Kyeyamwa et al 2008) and strengthen their position in the emerging livestock chains (Coppock et al 2005;Catley et al 2012;Aklilu 2008).…”

Transport Policies and Development

“…This is all the more problematic as poor accessibility can be especially harmful for the rural poor (see for example, Fafchamps & Shilpi, 2009, who find that geographic isolation is associated with lower welfare in Nepal). In Uganda, Kyeyamwa, Speelman, Huylenbroeck, Opuda-Asibo, and Verbeke (2008) find that high transport costs deter farmers from participating in local markets to sell their cattle, relying instead on farm gate sales, which reduces their income-generating opportunities. Similarly, in rural Kenya, land devoted to cash crops is limited to areas in proximity to markets (Omamo, 1998).…”

Contractual arrangements and food quality certifications in the Mexican avocado industry

“…Suppliers cannot access accurate information on the quality attributes of the product and buyers must deal with heterogeneous inputs of variable qualities while at the same time, being able to deliver a uniform and stable final product to consumer markets (Raynaud et al, 2005). Price uncertainty occurs when producers and buyers cannot access accurate information about the quality attributes of the product; thus, rather than reflecting the opportunity costs of production, the final price may simply reflect the relative strength of bargaining (Fafchamps et al, 2008;Kyeyamwa et al, 2008). Williamson (1985) has argued that in the case of environmental uncertainty and absent asset specificity, market governance is preferred because of its low cost and strong performance incentives.…”