The assessment of the limitations to value addition amongst small scale businesses
Abstract
The main objective of the study was to assess and determine the limitations to effective value addition amongst small scale agro-processing businesses. A descriptive cross-sectional study was adopted for this study; target population was all small-scale businesses engaged in agriculture value addition.
From the univariate analysis, 52% of the surveyed business enterprises were food kiosks, 20% were hotels, 18% were food hubs, and 6% were restaurants. All the surveyed enterprises had a valid trading license 68% of the surveyed enterprises were registered, 66% had books of accounting, 86% responded that they get constrained by legal challenges in their operations. Forty-Eight (48%) of the surveyed enterprises obtained raw materials from local markets, 10% got from input distributors and 18% were buying directly from farmers. All the surveyed enterprises said that they get challenges while getting inputs.
From the bivariate analysis, business registration (P=0.004, X2 =8.10), high prices (P=0.099, X2 =2.84), lack of modernized processing equipment (P=0.0512, X2=3.80), and legal constraints (P=0.067, X2=3.35) were associated with the ease of operation of enterprises/ value addition.
Finally, an attempt to determine the overall factors affecting effective value addition amongst small agro-processing factors, a binary logistic regression was run and it was found out that; registered businesses had higher odds of operating easily compared to those that are not registered (OR=117.5, P=0.007). It was again found out that businesses/ enterprises that were having technological challenges inform of lack of modernized processing equipment had lower odds of operating easily compared to their counterparts (OR=0.113, P=0.035). Finally, lack of efficient packaging technologies had a moderate effect on the ease of value addition amongst enterprises whereby firms lacking efficient packaging had lower odds of easily carrying out value addition compared to their counterparts (OR=0.078, P=0.065).
Findings indicated the need to support small scale firms/ enterprises have ability to purchase and utilize modern agro-processing technologies to increase their efficiency in value addition. In addition to this, the researcher recommended an extensive research be carried on technological constraints to value addition.