season is also a consideration, and credit sales typically are matched with a commitment to be a steady customer. Two salient phenomena are observed: reported unit milk prices differ widely within the same location and time period, and spot sales for cash tend to be at a higher unit price than sales on monthly credit. We hypothesize that dairy farmers in the Nairobi milk shed choose market outlets and levels of cash sales that reduce transactions costs and help assure reliable future outlets, at the expense of current income. A decomposition of producer milk prices across time, space, and market outlet suggests that reliability of outlet is worth up to 17 % of the spot price, in addition to waiting a month to be paid. Risks of credit default are illustrated by predicted weekly credit prices that are 5 % lower than monthly credit prices. Data from 21 smallholder farms monitored daily over one year are used to estimate a twolimit Tobit model of the role of the characteristics of market outlets and producers in explaining the share of producer output sold for cash rather than credit. Younger, more educated producers, receiving a regular off-farm salary, and near market centres are shown to be more likely to accept sales on credit. Older producers with more experience but less formal education are more likely to sell for cash rather than credit. The power of the model to explain different prices for milk in the same location and week suggests that such price differences viewed unidimensionally are not evidence of lack of market integration as conventionally defined, but an outcome of differential transactions costs and perceptions of risk by different producers.
This study assessed how responsive maize output is to price and non-price factors and how sensitive fertilizer and labour demand are to prices and non-price factors using cross-sectional farm-level data for 334 maize producing households in the High Potential Maize Zone of Kenya. The study employed normalized restricted translog profit function to estimate maize supply and variable input demand elasticities. Results show that maize price support is an inadequate policy for expanding maize supply. Fertilizer use was found to be particularly important in the decisions on resource allocation in maize production. Of the fixed inputs, land area was found to be the most important factor contributing to the supply of maize. It is suggested that making fertilizer prices affordable to small holder farmers by making public investment in rural infrastructure and efficient port facilities, and promoting standards of commerce that provide the incentives for commercial agents to invest in fertilizer importation, wholesaling and retailing would be desirable. Encouraging more intensive use of other productivity enhancing inputs in addition to fertilizer is also suggested, since land consolidation to achieve economies of scale may seem untenable in the light of the existing extensive sub-division of land parcels into uneconomical units.
Kenyan horticultural exports are often cited as a success story in African agriculture. Fruit and vegetable exports from Cote 'Ivoire have received less attention, but the export value is similar to that of Kenya. This paper focuses on three questions. First, do the horticultural sectors of Kenya and Cote d'Ivoire constitute valid success stories? Second, what factors have contributed to the success (or lack thereof)? And third, to what degree can the success be replicated in other African countries? The paper finds that Kenyan horticultural exports are indeed a success story: horticulture has become the third largest earner of foreign exchange, more than half the exports are produced by smallholders, and smallholders gain from producing for the export market. At the same time, the total number of smallholders producing for export is relatively small, and trends in European retailing may shift the advantage to larger producers. Cote d'Ivoire is not as clearly a success story because the most of the exports are produced on large industrial estates and because growth has been uneven. Ivorian exports rely on preferential access to European markets relative to Latin American exporters, raising doubts about sustainability. Factors in the growth and success of horticultural exports include a realistic exchange rate, stable policies, a good investment climate, competitive international transport connections, institutional, and social links with markets in Europe, and continual experimentation with the market institutions to link farmers and exporters. Smallholder participation is encouraged by farmer training and extension schemes, investment in small-scale irrigation, and assistance in establishing links with exporters. Many of the lessons of Kenyan horticulture can be applied elsewhere in Africa. Indeed, Kenya faces increasing competition from neighboring countries trying to replicate its success. At the same time, market institutions take time to develop, and demand constraints probably prevent other African countries from achieving the same level of success as Kenya.
The behaviour of farmers towards an intervention largely depends upon their perception. Consequentially, their perception will further influence their participation in such interventions. This study used data collected from four hundred smallholder farmers using a structured questionnaire to examine their perception and the determinants of perception towards a smart subsidy program. The Ordered Probit model was used in analysing the determinants of perception. Results showed that the farmers had a positive perception towards the program and that their perception was influenced by factors such as the gender of the household head, farm size, participation in the program, being the household head, education level, training and source of information.
Informal lending networks play a vital role in marginalized communities by providing financial support where formal institutions are limited. These networks enable households to access credit for financing agricultural activities, smoothing consumption, and managing risks. This study examines the effects of informal credit access through lending networks on the consumption expenditure of agropastoral households in rural Kenya. Using a subgraph sampling methodology, 198 network nodes were analyzed, and an endogenous switching regression model was employed to identify key determinants and impacts of informal credit access. The findings reveal that households with higher incomes, greater social group memberships, and stronger network centrality are significantly more likely to access informal credit. Access to informal credit positively influences household consumption expenditure, with high-access households experiencing a 24.61% increase in consumption expenditure. Additionally, low-access households have the potential to increase their consumption expenditure by 31.49% if they achieve higher informal credit access. These results underscore the critical role of informal lending networks in improving economic welfare in marginalized communities. Strengthening informal lending networks through policy interventions such as fostering social capital, promoting social and welfare groups and promoting income diversification can enhance economic development and support sustainable livelihoods among marginalized agropastoral households in rural Kenya.
Pearl millet is the fourth most important cereal after maize, rice and sorghum in terms of cultivation and production in the tropics, yet the least traded of all cereals in Kenya. New pearl millet varieties (KAT/PM1, KAT/PM2 and KAT/PM3) were introduced in response to low yield and birds’ menace that was wiping out the traditional pearl millet varieties in Kenya. Despite this, limited information exists on consumers’ willingness to pay and the determinants of willingness to pay estimates for these newly introduced varieties products. This study was undertaken to analyze consumers’ willingness to pay and the determinants of willingness to pay estimates for these pearl millet products. Results showed that most consumers (70%) were willing to pay a premium price with the mean willingess to pay off 42% over finger millet market price. Age, number of children below 12 years in a household, gender of household head, income and awareness levels were the important factors that positively influenced consumers’ willingness to pay premium prices. Key words: Pearl millet, new varieties, willingness- to-pay, consumer, Kenya.
Climatic events and other natural-related disasters experienced in the arid and semi-arid lands of northern Kenya negatively affect the pastoral livelihoods of the communities. Addressing vulnerability to climate shocks among pastoral communities of Kenya's Arid and Semi-lands presents a persistent challenge. Cash transfer programmes have increasingly grown as one mode of building household resilience. Understanding the role of cash transfer interventions on household resilience to climate shocks is key to policy programming. This paper aimed at determining the effects of cash transfers on household resilience to climate shocks. The paper evaluated the Hunger Safety Net Program, which is one of the largest unconditional cash transfer programs in Kenya. The Hunger Safety Net Program targeted poor people in northern Kenya including the counties of Turkana, Wajir, Marsabit, and Mandera. To establish the impact the paper compares households which received cash transfers with those that did not receive transfers. The panel fixed effects model was used to determine the effects of cash transfers on household resilience. The results indicate that cash transfers have positive significant effects on household resilience to climate shocks.
Agriculture plays a crucial role in the economy of sub-Saharan Africa. A feature of particular significance about the region is that the majority of households are heavily dependent on agriculture as their major source of livelihood. Smallholder agriculture is the principal producer of staple foods and cash crops, accounting for very large shares of national production and marketed output. For the respective countries, therefore, the performance of smallholder agriculture has crucial implications for the overall economic development process including the alleviation of rural poverty. The demands created by steadily increasing populations, and the pressing need to increase agricultural productivity means that these countries must continuously adopt methods to intensify agricultural production. Livestock production is an important consideration in the agricultural development of the region. Livestock, and especially cattle, have historically played multiple roles both in economic life and in socio-cultural traditions of African people. Cattle have been valued not simply as a source of food (milk, blood and meat) and hide but also as a visible form of wealth and a source of social prestige. In certain parts of the region, cattle still provide a valuable source of draft and traction power both for the plough and for transportation carts whereas in Arid and semi-arid lands (ASAL), cattle still provide a valuable security against famine. Traditionally, cattle were a valuable item in the payment of bride price while beef was a valued food item in ceremonies. Moreover, cattle manure is still valued as a fire-fuel and building material in ASAL whilst in arable areas it is valued as a fertilizer. In brief, cattle have retained their multiple roles among the African people. The relative importance of each role, however, varies with production and ecosystems (Freeland 1998; Fitzhugh 1998). In the high potential areas, the economic importance of the cow has increasingly shifted to commercial milk production while at the same time retaining the complementary role of sustaining soil fertility for sustainable agricultural production. In such area, increasing population pressure interacting with the need to sustain soil fertility has driven the change in production structure with dairying becoming an important component of agricultural production. Eastern Africa is Africa's most promising region for dairy production. The region is predominantly rural, with over 80 per cent of its inhabitants deriving its livelihood heavily from agriculture. It holds over 40 percent of Africa's cattle resource of about 222 million (FAOSTAT). This study looks at the development of dairy industry in two east African countries - Kenya and Uganda (Figure 1). From the early 1910s, Kenya has developed a dairy industry that ranks among the largest in sub-Saharan Africa. The industry is especially noted for its smallholder base. Uganda, on the other hand, has a large unexploited potential for dairying. In order to highlight special aspects of the respective country's industry, the study looks at the countries in turns. The study seeks to take a historical look at the respective dairy industries with a view to identifying major turning points in their respective developments. We then apply the DE-A-R framework in analyzing the circumstances surrounding respective turning points, including the socio-political forces that influenced the specific forms of change. Our purpose is to identify the forces, and key actors, that have driven changes in the systems, and to understand the impact these changes have had on the overall production, on smallholder incomes and on the environment by comparing across countries. We hope to identify key ingredients necessary for achieving successful smallholder dairy growth elsewhere.
Pearl millet is the most commonly used millet around the world. However, in Kenya, little information exists concerning the distributional implication of pearl millet market structure, market channel efficiency and its determinants. As a result, the characteristics of pearl millet value chain have remained scanty in the literature. This paper characterizes Kenya’s pearl millet value chain focusing on its structure, functions and trade within the production areas (Mbeere district) and the final markets (Nairobi) of Kenya. Data was obtained from 255 market actors (120 producers, 2 rural agents/ brokers, 25 traders, 8 processors and 100 consumers) between August-September 2012 and analysis done using value addition approach and a multiple regression models. Evidence showed that high returns to participation accrued to processors compared to producers and traders despite their limited functions. Transport costs, border taxes and commission charges were major components of marketing cost. Pearl millet market channel efficiency was positively influenced by level of education and whether an actor undertook value addition activities before selling positively influenced. Keywords : Mbeere district, Market channel efficiency, Final markets, pearl millet
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