DR.NZUMA JONATHAN MAKAU

This paper evaluates the effects of market reform policies on the volatility of Irish potato prices in Kenya through an analysis of a 20 year monthly time series data set from Nyandarua district using an autoregressive econometric approach. The empirical results show that there has been a rise in Irish potato prices and lowering of price volatility after the implementation of market reform policies. The real prices exhibit seasonal variations around an upward trend with the prices being depressed during the harvesting period. The price risk premia is found to be negative revealing that the cost of carrying out Irish potato business declined, and farmers were better off with the implementation of the reforms. The collection and distribution of price information, storage of Irish potatoes during periods of glut, improvement in productivity and use of commodity exchange markets can help to reduce price volatility.

In Kenya, trade policy reforms in the cereals sector were initiated as a key component of the economy-wide structural adjustment programmes (SAPs) during the mid 1980s. The SAPs were later strengthened and made irreversible by Kenya’s commitments at the multilateral trade negotiations. However, the welfare effects of these trade policy reforms remain controversial. This paper to quantifies the market and welfare impacts of trade liberalization in Kenya’s maize sector using a partial equilibrium model with market interrelationships at the farm, wholesale and retail levels. The model is calibrated to simulate a 24 percent reduction in maize import tariffs and a complete abolition of tariffs. The simulations results suggest that tariff reductions yield price decreases across the three market levels. The declining prices increase maize consumption but reduce domestic production. Consequently, consumer surplus increases while producer surplus decreases. However, the gain in consumer surplus is not sufficient to compensate the loss in producer surplus. Thus, the implementation of the multilateral agricultural trade agreement is likely to leave Kenya’s maize sector worse off and cannot be considered as a viable policy based on the compensation principle.

In most smallholder cropping systems in Africa, crop improvement and resource management are essential for increasing crop productivity. These issues are more acute in the semi-arid areas where farmers practice subsistence farming with little use of improved technologies that translate to sub-optimal yields and hence food insecurity. Consequently, factors determining technology utilization in these areas should be identified to guide policy interventions. This study analyzed the factors influencing the intensity of adoption of improved maize seeds and inorganic fertilizers in the dry mid altitude zones of Kenya. Multi-stage sampling was used to select 121 farmers from Machakos district who were interviewed using pre-tested semi-structured questionnaires. Descriptive statistics were analysed and a Simultaneous Equation Tobit Model estimated. McFadden's R-Squares for the models were 0.075 and 0.133 for seed and fertilizer adoption, respectively. These levels of explanatory power and study findings were consistent with other cross-section studies using censored data to explain technology adoption. The rates of adoption of improved maize seeds and inorganic fertilizers were 65 and 36 percent respectively. Men outnumbered women and were better adopters of improved technologies. Major adoption limitations included recycling of seeds and high input costs. Tobit regression results indicated that age, formal education, fertilizer amounts, off-farm income and early maturity perceptions significantly influenced the intensity of adoption of improved maize seeds. Formal education, experience, hired labour, fertilized area, farm size and attendance to field days significantly influenced the intensity of adoption of inorganic fertilizers. A major conclusion drawn from the study was that the use of improved maize seeds and inorganic fertilizers was low and declining as indicated by the level of use of these inputs. The recommended seed rate for this area was 25 kg of seed per hectare while recommended fertilizer rates were 50 kgN/ha. However, farmers on average applied 8.6 kgl-l/ha.while adopting a seed rate of 10 kg of seed per hectare. Adopters of both technologies achieved 34 percent while nonadopters achieved only 15 percen.t of the returns possible from the maize enterprise in this area (as a ratio of farmers returns to optimal research returns). These low and declining levels of use and unpredictable weather conditions have translated to sub-optimal yields, persistent food insecurity and rising poverty levels. Appropriate policy interventions that can increase the use of these inputs can greatly improve the food security situation in the area. The study underscored the importance of extension, credit and distance to the market in influencing adoption. The results confirm the importance of producer education and arguably, educating farmers is likely to increase the use of these technologies. Therefore, there is need for the government and other development agencies to invest more in village schools and other educational efforts such as adult education. The government should ensure that all individuals acquire some basic level of education by making primary level of education compulsory.