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Maize Productivity And Impact of Market Liberalization in Kenya

Author(s):  Karanja, Daniel, Jayne, Thomas, Strasberg, Paul

Most countries in Africa are facing an imminent food crisis. Whereas at independence most of these economies were self-sufficient in food production, the combination of recurrent oil crises of the 1970s, increasingly adverse weather, poor macroeconomic and sectoral performance in the 1980s and 1990s, and declining public investment in infrastructure undermined the capacity of these economies to supply sufficient food from domestic sources.

Further, rapid population growth and a persistent decline in the natural resource base resulted in a decline in per capita food production and unmet food demand. The ultimate effect of these is reflected in a growing reliance on food imports and food aid, increased poverty and civil strife. Increasing food productivity is, thus, vital for enhancing future food security, peace and health.

With an expected doubling of Africa’s current population to about 1.3 billion by 2020, addressing the continent’s food crisis will require great wisdom and vision. However, since most African households are engaged in agriculture, the alleviation of poverty, hunger and malnutrition will be expedited through improved agricultural productivity caused by greater investment in economic growth that provides demand for rural nonfarm products and greater technical change (Byerlee and Eicher 1997).

Kenya is no exception in many regards. It has a predominant agrarian economy. The major staple crop, maize, is grown in almost all agro-ecological zones in two out of every three farms. In the past two decades, the country has shifted from being a net food exporter to a persistent net importer due to policy and demographic factors mentioned above. Domestic maize demand outstrips domestic production in six out of ten years, leading to increasing reliance on imports to bridge the gap.

This is in spite of a tremendous maize production potential exhibited between 1964-75, fueled by the introduction of maize hybrids and related technologies, often dubbed “Kenya's Green Revolution” (Karanja 1996). Figure 1 shows trends in maize area, yield and production from 1963-1997.

That Kenya must increase its farm productivity and income is no longer debatable but is a great necessity. Over 85% of the population derive its livelihood from agriculture, most of whom engage in maize production. With maize occupying such a central position in Kenyans' diets and farm production activities, it is imperative that ways and means of improving maize productivity be sought.

Evidence from recent years indicates that average maize yields and area have stagnated at below 2 tons per hectare and about 1.5 million hectares, respectively (Figure 1). Given the limited arable land area and low irrigation development capacity, there is no doubt that Kenya will have to rely relatively more on yield improvement than area expansion for future increases in maize production. The Kenya Agricultural Research Institute has an uphill task of generating and adapting better maize technologies to local conditions, more so the latter than the former, on low and dwindling research funding.

Meanwhile, the extension program of the Ministry of Agriculture should seek a more cost-effective means of using its extensive network of extension agents to supply farmers with basic and sound agricultural advice. Moreover, past success in maize production was achieved by exploiting the tremendous synergy between the technology development, dissemination and seed multiplication and distribution programs (Karanja 1996). Lack of adequate funding, poor research-extension-farmer linkage, low private investments in maize research and development, and high human capital turn-over are problems that must receive adequate attention and resolve if a new way forward is to be charted.

Needless to say, the government must continue providing an enabling environment through clear policy goals and commensurate investments in infrastructure, education and information technology which are public good assets that have in the past proven to be important pre-requisites for agricultural and economic productivity growth. Although numerous studies in the recent past have explored and discussed ways and means of increasing maize productivity in Kenya, this study takes the issue further and explores the impact of recent market reform policies, specifically maize market liberalization, on maize productivity.

The latter is critical considering the level of expectations that greeted the reform process back in the early 1990s. Removal of input and grain price controls was meant to reduce the government's budgetary burden, mainly through diminished activities of the National Cereals and Produce Board, and encourage private sector participation in maize trade. This was considered useful in two ways (1) to reduce transaction costs of marketing and distributing maize, thereby improving trade incentives for both traders and farmers; and

(2) to improve access to food by low-income urban consumers and net buyers in maize-deficit regions. The impacts of market liberalization have ranged from greater private sector participation in maize trading to perceived reduction in farm gate maize prices.

However, these impacts are hard to discern for three reasons. First, they are difficult to isolate from other macro-economic policy and weather-induced effects. Two, the reform process has neither been smooth nor complete. Instead, it has been subjected to frequent reversals and holding patterns. Only recently have decisive reform measures been taken. Finally, weak and partial data has reduced the capacity to investigate the impact of reforms on productivity. This paper explores the determinants of, and investigate the impact of market reforms on, maize productivity.

Maize Productivity And Impact of Market Liberalization in Kenya

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