Diversification in Production and Marketing Strategies for Higher Returns on Farmlands Located in a Coastal and Tourist District of Kenya: Lessons for South Africa’s Land Reform Projects in Similar Locations.

Abstract

Failures in land reform projects in South Africa are linked to many factors including lack of skills, markets, etc. Hence, there has been growing interest to implement joint-ventures between established and new farmers. It is argued that the ventures would not only allow new farmers access to useful capital and skills but also to existing business networks of partners. Nevertheless, some projects continue to fail including some in joint-ventures, mainly due to management conflicts. This study argues that conflicts stem largely from limited information flows which raise transactional costs. An illustration of how diversifying production and marketing strategies in 2018 by smallholders in the Kilifi county, a coastal and tourist destination region of Kenya, limit these costs and lead to high income returns to farmers is presented. Lessons are drawn for general South Africa smallholders in similar tourist areas. Mixed research methods were used to gather data, first from semi-structured interviews with farmers who use online marketing platforms. The information was used to construct a questionnaire for a 2018 field survey conducted in Kilifi. Descriptive patterns and probabilities of farmer attributes were analysed using a multinomial logistic model on Stata. The variables explored included land sizes under cultivation and marketing strategies for buyers, including hotels and restaurants for tourists, against income returns per land size. It was found that farmers on land below 4 acres were more likely to diversify their products, and marketing strategies for different types of buyers than groups on bigger pieces of land. The relative income returns per acre to ‘smaller’ farmers were the highest of the sample. The income returns were also associated with clearly defined land ownership rights.