Effect of Cost Management on Financial Performance of Agribusiness Enterprises in Kenya

Abstract

Agribusiness enterprises in Kenya, are a major economic activity that should be creating employment thus increasing GDP. In the recent past, there have been renewed efforts by the government and other players to promote Agribusiness enterprises. Thus this study sought to determine the influence of cost management on performance of Agribusiness enterprises in Kenya. The study design is descriptive panel research design. Secondary data was used for analysis. The target population was four Agribusiness enterprises with a total population of one thousand two hundred and forty five (1,245) farmers registered as at December, 2018 by the Commissioner of cooperatives in Kenya comprising of Homabay, Bungoma, Busia and Siaya counties which also formed the study target units. Census sampling was used to select sample of the population. Secondary data over the ten year-period covering 2009-2018 was obtained. Data was collected using secondary data collection sheet and analyzed using multiple panel regression models. Limitations faced during data collection included high illiteracy levels amongst members. This was controlled by taking the officials through the areas of cost management to have them understand the concepts under enquiry. The study findings showed that cost management had significant influence on return on investment, a measure of financial performance of Agribusiness enterprises in Kenya and tests for significance also showed that the influence was statistically significant. The study therefore recommends that all Agribusiness enterprises farmers be trained on cost management aspects.