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Legal Setup and Performance of Post-Privatization Artificial Insemination Service Providers in Nyeri County, Kenya

Alex Mirara Timothy Maitho Ursulla Okoth
Vol 7(1), 35-42
DOI- http://dx.doi.org/10.5455/ijlr.20161222032217

This study investigated the differences between the various legal entities of organizations which provide the privatized artificial insemination services in Nyeri County, Kenya. The findings were that 89.5% of the service providers were operating as private entities, 7.0% were in Cooperative societies while 3.5% were operating as farmers’ self-help groups. All the artificial insemination practitioners used motorcycles for transport and stored semen in liquid nitrogen tanks. Government support to the service providers was only in form of training which was received by 21% of the participants. Non-governmental organizations also provided training to 17.5% of the respondents. However, these non-governmental organizations provided financial credit to 3.5% as well as equipment support to 3.5% of the service providers. It was concluded that private artificial insemination service providers have a potential of performing better than Cooperative societies or self-help groups despite the benefits of farmers having a jointly owned service.


Keywords : Artificial Insemination Legal Setup Bottlenecks in AI Services

Introduction

Private artificial insemination (AI) practice has existed in most of the developed countries for a long time. In Sub-Saharan Africa, the AI services were supported by the Governments since the countries gained independence until 1992 when the continent was facing an economic down turn and Government services were becoming too expensive to run (Ouma, 2008). According to Sen and Chander (2003), privatization was intended to improve the quality of the services and also to reduce fiscal constraints on the Governments. Three models of privatization were employed namely: provision of AI services by public Veterinary personnel on the basis of cost recovery; complete privatization of Veterinary services including AI where private Veterinarians provide services with a profit motive in an open market and; a mixed system of cost recovery and privatization policy for Veterinary services. All these models finally led to three levels of results which were aimed at state withdrawal; reduction of the budget deficit and; improvement of services. The Republic of Kenya (RoK) was among the developing nations in which AI services were fully privatized in 1992 hence government Veterinary staffs no longer inseminate cattle. (Tber, 2009). The services have since been run by non-governmental AI service providers in various organizational forms. Entry into the market as a service provider is restricted through licensing by the Department of Veterinary Services upon fulfilling the requirement of undergoing basic AI training. The Government further detached itself from the process of controlling prices hence market forces were allowed to come into play in the process of market liberalization.

Privatization of AI services culminated into the emergence of service providers who were registered in various legal forms. The most common legal entities registered as AI service providers by the Director of Veterinary Services (DVS) include Cooperative societies, self-help groups and private AI service providers (DVS, 2013). This study sought to investigate if there is a significant difference between the different forms of service provider organizations in the provision of AI services. Cooperative societies in Kenya are registered under the Cooperative Societies Act, Chapter 490 (RoK, 2012) and they are described as “a society of at least ten persons who are registered as a Cooperative society by the Commissioner of Cooperative Development, with or without limited liability”. Cooperative societies which provide AI services in Nyeri County are registered as Dairy Cooperative Societies and are constituted to market milk and other farm produce. Nyeri County has six active Cooperative societies. The Cooperative societies have further joined together and registered the Nyeri County Dairy Producers Cooperative Union with the aim of improving farmers’ earnings from dairy production through value addition of milk (DVS 2013). Coltrain et al (2000) describe value addition as “to economically add value to a product by changing its current place, time, and form characteristics in order to bring out qualities which are more preferred in the marketplace”. The Cooperative Union has established a milk cooling plant to enable it achieve that aspiration. Self-help groups consist of a group of people who come together in order to deal with an issue of common interest. They are loosely bound by law and membership is only restricted by members’ acceptance and common interest. They are however, registered by the Commissioner of Social Services. Available data shows that there are four self-help groups providing AI services in Nyeri County, which are mainly distributed in the Eastern part of the County (DVS 2013). These groups were mainly formed to market milk after the collapse of Cooperative societies in the region. Though self-help groups are formed for a particular purpose, their roles have evolved over time due to the changing needs of the members (Sundaram, 2012).

Private AI service providers are single proprietorships, usually operating with one or two employees. These service providers set up businesses mainly to provide clinical services but later divested into providing AI services. There are 94 private AI service providers in Nyeri County, whose qualifications vary from a university degree to certificate levels (DVS, 2013). This research studied the contribution of each of the three legal forms of AI service providers with a view of recommending on the best approach towards forming an AI service providing organization.

Methodology

The study adopted a descriptive cross-sectional survey design and used a multi-method approach in order to obtain qualitative and quantitative data. The survey targeted 65 AI service providers in Nyeri County, Kenya. The sample was derived from a population of 95 AI service providers who operate in the County (DVS, 2013). Simple random sampling was used to identify the respondents for the study. Data collection was done through self-administered questionnaires with open and closed ended questions.

Results

Privatization of AI services gave rise to different legal forms of AI service providers in which differences in performance were likely to arise. In order to compare the performances of the different legal forms of the AI service providers, data on various aspects of their operations was analyzed as shown in the following sections.

Distribution of Legal Status of AI Service Providers

The study investigated the distribution of various legal registration types of the AI service providers using two indicators namely the type of organization and the number of practitioners involved. Table 1 shows the different legal forms of service providers found in the study area.

Table 1- Legal Status of AI Service Providers

Legal Status Frequency Percentage
Government 0 0
Cooperative Society 4 7.0
Private Provider 51 89.5
Farmer Self-Help Group 2 3.5
Other 0 0
Total 57 100.0

Table 1 shows that there were only three legal types of AI service providers namely farmers’ self-help groups, cooperative societies and private service providers. The table also shows that majority (89.5%) of service providers were private. Cooperative societies and farmers’ self-help groups comprised of 7.0% and 3.5% of service providers respectively. Notably, there was no service provision from Government.

Semen Storage

Table 2 shows a cross tabulation of legal status of service providers and size of liquid nitrogen cylinders used for semen storage.

Table 2- Comparison between Liquid Nitrogen Cylinder Size and Legal Status

Legal Status of AI Provider Total
Cooperative Society Private Provider Farmer Self-Help Group
Liquid Nitrogen Cylinder Size in Litres 5 or Less 0 51 2 53
Over 35 4 0 0 4
Total 4 51 2 57

Table 2 revealed that all the AI service providers used liquid nitrogen to store the semen at -196oC. This is likely to lead to a higher efficacy of the semen and thus a higher conception rate. However, the size of the liquid nitrogen cylinder used by private service providers and self-help groups was less than five litres while service providers from Cooperative societies had bigger cylinders of more than 35 litres.

Mode of Transport

The mode of transport was considered as an indicator of the ability to provide quality services. Table 3 shows a cross tabulation of the mode of transport and legal status of AI service providers.

Table 3- Comparison between Motorbike Use and Legal Status

Legal Status of AI Business Total
Cooperative Society Private Provider Farmer Self-Help Group
Mode of Transport Private Motorbike 1 51 2 54
Public Motorbike 3 0 0 3
Total 4 51 2 57

Table 3 shows that all the AI service providers used motorbikes as a means of transport for providing AI services. Out of the 57 AI service providers who participated in the study, 54 (94.73%) used privately owned motorbikes. The other 5.27% used public motorbikes. A closer look at the usage of the motorbikes across the genders revealed the hired motorbikes which are locally referred to as boda boda, were used by female AI service providers who were working for cooperative societies. This implies that female service providers were likely to rely on somebody else to ferry them to service points.

Resource Support

Resource support was considered as one of the key ingredients that would influence the growth and performance of the AI industry. The study investigated whether there is any external support to AI service providers either from Government or Non-Governmental Organizations giving the results shown in Table 4.

Table 4- Legal Status of AI Business and Support Received

Source of Support Legal Status of Provider Support Received Total
Yes No
N Percentage N Percentage
Government Cooperative society 4 100 0 0 4
Private 6 11.8 45 88.2 51
Farmer SHG 2 100 0 0 2
Total 12 21.1 45 78.9 57
NGOs Cooperative society 1 25 3 75 4
Private 10 19.6 41 80.4 51
Farmer SHG 1 50 1 50 2
Total 12 21.1 45 78.9 57

SHG: Self Help Groups; NGOs: Non-Governmental Organizations

Table 4 shows that 21.1% of the AI service providers had received resource support from the Government and 21.1% had received support from NGOs. Though the number of AI service providers who had received Government support was the same as those who had received NGO support, the two groups were not entirely mutually inclusive. A further scrutiny of the data showed that 14.0% of the respondents had received resource support from both the Government and NGOs. This implies that 71.8% of AI service providers had not received any resource support whatsoever. A further probe showed that 100% of Cooperative societies and self-help groups had received support from the Government. However, Government support for private AI service providers was low, since only 11.8% of the respondents received this support. Support from NGOs favoured self-help groups more than other service providers. This is evident from the fact that 50% of the self-help groups had received some support from NGOs. There was low NGO support to Cooperative societies and private providers where 25% and 19.6% had received some support respectively. This is an indication that NGOs have low confidence in individuals and Cooperative societies.

Types of Resource Support Received by AI Service Providers

The type of support given contributes to the improvement in quality of AI services. Table 5 shows the type of support given to the service providers by Government and NGOs.

Table 5- Types of Support Received by AI Providers

Type of Support Government Support NGO Support
Frequency Percentage Frequency Percentage
Credit 0 0 2 3.5
Equipment 0 0 2 3.5
Training 12 21.0 10 17.5
Semen Supply 0 0 0 0
Consumable Supplies 0 0 0 0

Table 5 shows that the Government did not provide any form of material or financial support to AI service providers. Government support in form of training was received by 21.0% of the service providers in order to improve skills. On the other hand, NGOs also provided support in form of training to 17.5% of the AI service providers. NGOs support was not confined to training as was found with Government support since 3.5% of the respondents stated that they had received support in form of financial credit and another 3.5% indicated that they had received support in form of equipment for AI.

Bottlenecks in AI Services

Table 6 shows the bottlenecks which were identified in the study as impediments to the delivery of quality AI services.

Table 6- Bottlenecks Faced in AI Services

Bottleneck Yes No Total
Skill 0 57 57
Semen Quality 0 57 57
Equipment 0 57 57
Animal Husbandry 46 11 57

Table 6 shows that skill, semen quality and equipment were not considered as bottlenecks in the provision of quality AI services. However, the animal husbandry practices were cited as a bottleneck by 80.7% of the AI provider respondents. This suggests that there is a need to focus more on the provision of extension services and the availability of farm inputs.

Discussion

The collected data revealed that there were only three legal forms of service providers in the study area namely private, self-help groups and Cooperative societies with a respondent distribution of 89.5%, 7.0% and 3.5% respectively. Private AI service providers were sole proprietorships in which the service provider was also the proprietor and sometimes the only employee in the organization. Similarly, farmers’ self-help groups and Cooperative societies were managed with very little Government indulgence in their management (Mogoa et al., 2004). Government indulgence in Cooperative societies is only in auditing their books. Self-help groups only receive Government indulgence in cases of solving disputes (RoK, 2012; Sundaram, 2012). The implication of this finding is that maintenance of standards in AI is not uniform. The high level of market share held by private providers was attributed to their large number and probably the low level of bureaucracy that is associated with private businesses, particularly where the proprietor is the service provider in a single-employee sole-proprietorship organization. Mikami (2007) points out that cooperative firm are financially less viable than investor-owned firms. The data also showed that even among the farmers who members of cooperative societies or self-help groups were, there was a tendency to seek the service from private service providers. In a study aimed at examining the situations of sole proprietorships in an e-commerce environment, Permwanichagun et al (2014) found that products of a sole proprietorship are selected for many reasons: 42.22% due to the goods’ value to the target group; 29.98% as a result of quality; 15.79% because it is a modern product; and 12.01% due to the utility of the product.

It was found that the formation of self-help groups is a recent development. According to qualitative data obtained, it was established that the groups started forming after privatization. This was triggered by cases of poor management practices in the Cooperative societies which brought very high operational costs thus rendering them insolvent. The fall of milk prices to untenable levels aggravated the situation. Only a few Cooperative societies survived this trend. Those that survived depended on donor funding in order to stay in business. The funding has enabled them to purchase high volume liquid nitrogen containers unlike other forms of service providers. Wanyama (2008) agrees that it is true that a significant proportion of Cooperative societies registered in Kenya are dormant and demonstrates that the trend had been rising, even though new Cooperative societies continued to be registered at the time of this publication. The Cooperative movement has continued to play an important role of savings mobilization and providing employment in Kenya (Gunga, 2008). The need for farmers to jointly acquire inputs and services as well as to market their produce together led them to engage in the alternative of forming self-help groups.

Conclusion

The study found that there was a proliferation of the number of private AI service providers as compared cooperative societies and self-help groups, despite their low levels of capitalization. This showed that farmers did not embrace the idea of having a jointly owned AI service and hence preferred getting the service from the private service providers. This also implies that the private AI service providers can cost their services higher than group services in order to break even and stay in business, as long as farmers are willing to pay. Though Cooperatives have been shown to bring benefits such as poverty alleviation (Gweyi et al., 2013), there is a need for strengthening them in order for farmers to enjoy their benefits.

Acknowledgements

The authors wish to acknowledge the University of Nairobi and Kenya School of Government for their support while carrying out this study.

References

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