EFFECT OF PRICING STRATEGY ON MACADAMIA NUT PRODUCTION: A QUANTITATIVE STUDY AMONG SMALL-SCALE FARMERS IN KIRINYAGA COUNTY, KENYA

Abstract

Macadamia farming offers an important source of income for producers worldwide and especially for small-scale farmers in Kenya. Kirinyaga County is one of the major macadamia producers within the central and eastern highlands of Kenya. The crop is a major source of income for small-scale farmers. However, the county is experiencing low average yields, with trees producing only 50% of the crop potential. With such low yields, the livelihood of smallscale farmers is at risk. The objective of the study was to analyze the effect of pricing strategy on macadamia nut production among small-scale farmers in Kirinyaga County. The study was anchored on the Cobweb theory. The target population was 8,004 small-scale macadamia farmers in Kirinyaga County. The study used a descriptive survey design and the multistage random sampling technique. A structured questionnaire was used, and the data was analyzed with the aid of SPSS version 26. A simple linear regression model was used in data analysis. The OLS assumptions were tested before conducting regression analysis. The results revealed a positive and significant association between pricing strategy and production of macadamia nuts (r = 0.379, p = 0.000) and R² = 0.143, meaning that 14.3% of the variance in production of macadamia nuts is explained by pricing strategy. ANOVA analysis reported an F-statistic (53.379) with a p = .000. The t-value of 6.318 was higher than the critical t-statistic (1.96). The null hypothesis that “There is no significant effect of pricing strategy on production of macadamia nuts by small-scale farmers in Kirinyaga County” was therefore rejected. The study concluded that the pricing strategy had a significant effect on the production of macadamia nuts by small-scale farmers in Kirinyaga County. The study recommended that the government, through the ministry of agriculture, should facilitate a partnership between macadamia farmers and macadamia processors in which a pricing strategy that protects their mutual interests is crafted.