Impact of Manufacturing Equipment on Growth of Smallholder Agro-processing Industry in Bureti District, Kericho County, Kenya

Abstract

A gradual shift from agriculture to industry has been witnessed in the pattern of economic growth in developing countries over the past decade. Agro-processing is being focused-on as the main driver of the transformation from primary agriculture to industry to provide additional income generating opportunities. Inspite of the emerging importance of agro-processing in the industrialization process its growth has been faced with the constraints of access to agro-processing technologies, especially among smallholder agribusinesses. This research sought to determine the extent to which access to manufacturing equipment impact on growth of smallholder agro-processing industry using a cross-sectional descriptive design. The study found that costs of acquiring manufacturing equipment and distances to sources of manufacturing equipment, as influential factors of access to technology, have inverse relationships with growth of smallholder agro-processing industry.

For instance chi-square test for relationship between distances to manufacturing equipment sources and the number of smallholder agro-processing businesses set up was significant at 0.05 confidence level (?-value = 0.002). It was established that long distances travelled to purchase manufacturing equipment are critical impediments to growth in number of smallholder agro-processing businesses. Similar trends were observed between cost of manufacturing equipment and growth in number of agro-processing businesses as high costs of equipment constrained the access to – and – therefore reduced the rate of growth in number of small agro-processing businesses. Diversity of processing equipment was found to be low and had linear relationship with growth of the industry. It was therefore concluded that low level of access and narrow range of agro-manufacturing equipment significantly constrain the growth in number of smallholder agro-processing units. It was recommended that governments should create conducive environment for local manufacture of agro-manufacturing equipment as a strategy of stimulating and decentralizing agro-industrialization of rural areas.