An Assessment of the Competitiveness of Shea Actors in the Shea Nut Value Chain of Northern Uganda
Abstract
Shea nut is an economically important parkland tree species found in parts of northern and eastern Uganda. In northern Uganda, the shea nut value chain consists of collectors, traders, and processors. Whereas the collectors form the bulk of the actors in the chain, it is not clear whether the scale of operations of actors above the chain makes them less competitive. This study assessed the competitiveness of shea actors along the chain. Cross-sectional primary data was collected using a respondent-driven sampling approach. A total of 252 collectors, 51 traders, and 22 processors were included in the study. Results showed that the average market share of the collectors, traders, and collectors is 0.4%, 1.9%, and 4.5%, respectively. Using the concentration ratio (CR4) which measures the market share of the four largest players, results showed that for both collectors and traders, the CR4 was less than 40% (collectors =10%; traders=15%). This finding suggests that, individually, each collector and trader are too small to influence the outcome of the shea market transaction but can only do so collectively. However, for the processors, the CR4 was 65%, implying that for the processors, the 4 largest players control up to 65% of the market. This suggests an oligopolistic tendency among shea processors, with the few large processors able to individually influence both collectors and traders. These findings suggest the need to regulations to protect both the trader and the collectors from unfair competition that may come from the few processors
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References
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Copyright (c) 2024 Deborah Akatwetaba, Basil Mugonola, Apollo Kasharu, Anthony Egeru
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