Marketing tea for Uganda's smallholder sector

Abstract

English: Literature shows that consumers and processors demand a particular good or product based on the utility they are able to derive from it, or on its ability to meet processing requirements. A riumber of studies have been conducted to model the relationship between price and the various quality attributes for a number of products such as vegetables, pork, beef, pineapples, etc. However, no such studies have previously been conducted on a product like tea, whose price determination is greatly dependent on the physical appearance and savoury. The quality of the various tea grades implicitly determines the price received by the producer. It is widely recognised in the tea fraternity that a good tea fetches a higher price. It is therefore of utmost importance to fully understand the impact of change in various quality attributes on the price of a particular tea grade. The absence of the ability to estimate the impact of change in quality attributes causes tea producers to make decisions without all the necessary information, which could in turn lead to losses in terms of price. Market research has tended to concentrate on seller concentration and has paid little attention to buyer concentration. Literature shows that buyer concentration exists commonly in agricultural markets due to the nature of the products. This study has shown that the level of buyer concentration at the Mombasa auction market is high. Therefore, there are legitimate concerns that the market will not guarantee an efficient price to the producer. The East African Tea Trade Association has an important role to play in ensuring that these concerns are dealt with by seeing to it that the rules and regulations do not encourage this to happen. Producers, on the other hand, may find the balance through increased market access, which will entail exploring other market alternatives and not being too dependent on the Mombasa auction market. There are a number of export opportunities in already established tea markets, which can easily be explored by the tea producers through increased promotional activities and trade alliances. Growth prospects are still greatly limited by the infrastructure, provision of financial and extension services, research, etc. The feeder road networks still remain in a very poor state, at times necessitating repairs by the factories so as to be able to collect green leaf. The government is still unable to provide an adequate agricultural extension service and the smallholder factories have had to start their own extension services. The government has recently embarked on a programme for the modernisation of agriculture, but this will only show tangible results if a conducive environment for agricultural trade in the country is created.

Afrikaans: Literatuur toon dat verbruikers en verwerkers se vraag na 'n spesifieke goed of produk gebaseer is op die nut wat hulle daaruit kan kry of op die vermoë daarvan om te beantwoord aan die vereistes vir verdere verwerking. 'n Aantal studies is al gedoen om die verhouding tussen prys en die verskeie kwaliteitseienskappe van produkte soos groente, vark, beesvleis, pynapples ensovoorts te modelleer. Daar is egter nog nie 'n soortgelyke studie gedoen op 'n produk, soos tee, waarvan prysbepaling van die fisieke voorkoms daarvan en smaaksintuie afhanklik is nie. Die kwaliteit van die verskillende grade tee bepaal die prys wat ontvang word deur die produsent implisiet. Dit word wyd erken in die teegemeenskap dat 'n goeie kwaliteit tee beter pryse behaal. Dit is dan ook daaroor baie belangrik om die impak van veranderings in die verskeie kwaliteiteienskappe op die prys van 'n spesifieke graad tee ten volle te verstaan. Die afwesigheid van die vermoë om die impak van veranderinge in die kwaliteitseienskappe te skat, veroorsaak dat teeprodusente besluite neem sonder al die nodige inligting, wat weer kan lei tot verliese in terme van prys. Marknavorsing is geneig om te konsentreer op die konsentrasie tussen verkopers instede daarvan om aandag te gee aan die konsentrasie tussen kopers. Volgens die literatuur kom konsentrasie tussen kopers weens die eienskappe van die produkte algemeen voor in die landbou. Hierdie studie het getoon dat die vlak van konsentrasie tussen kopers op die Mombasa veilingsmark hoog is. Daar is dus geldige kommer dat hierdie mark nie effektiewe pryse aan produsente kan waarborg me. Die Oos-Afrika Teehandelsvereniging het 'n baie belangrike rol om te speel in hierdie verband deur toe te sien dat die reëls en regulasies dit verhinder. Produsente kan ook 'n balans vind deur verhoogde marktoegang, wat sal behels dat ander markalternatiewe ondersoek moet word en dat hulle nie so afhanklik moet wees van die Mombasa-veilingsmark nie. Daar is 'n hele aantal uitvoergeleenthede in reeds gevestigde markte vir tee wat maklik benut kan word deur teeprodusente, deur onder meer verhoogde promosie-aktiwiteite en handelsalliansies. Groeivooruitsigte word steeds grootliks beperk deur infrastruktuur, verskaffing van finansiële en voorligtingsdienste, navorsing ensovoorts. Die padnetwerke is steeds in 'n baie swak toestand, wat by tye noodsaak dat die fabrieke self herstelwerk moet doen om die groen teeblare te kan insamel. Die owerheid is ook steeds nie daartoe in staat om die. verlangde landbouvoorligting te verskaf nie, wat veroorsaak het dat die kleinboerfabrieke met hulle eie landbouvoorligting begin het. Die regering het onlangs begin met 'n program vir die modernisering van landbou, maar dit sal slegs tasbare resultate lewer as 'n omgewing wat landbouhandel in die land ondersteun, geskep word.