An economic analysis of cereal banks in bungoma and Butere-Mumias districts of western kenya
Abstract
Cereal banking involves buying of cereals or grains during periods of lower prices,
storing and selling out the stocks when prices are higher. In Kenya they were started with
the aim of enhancing local food security and surplus marketing. Cereal banks are some of
the interventions which have been tried using non-governmental approach although they
have received mixed teactions about their performance especially on the issue of
sustainability. Weaknesses in the analytical and empirical arguments for cereal banks
have been highlighted. This study addressed some of these issues by analyzing the factors
that influence farmer participation in cereal banking and effects of cereal banks on prices
and food security. The study area comprised two districts in Western Kenya where cereal
banks were initiated through support organizations. Analytical procedures included
descriptive analysis of the socio-economic characteristics of the households studied and
logistic regression of the socio-economic factors which were perceived to determine
participation in cereal banking. The significant factors that were identified as determining
participation in cereal banking include age, gender and farming experience of the
household head; distance to the nearest market; household access to credit and selling to
cereal banks. There was evident of weaknesses related to consistency and general
performance of cereal banks, especially after the supporting organizations reduced their
involvement. Recommendations suggested on how these institutions can be improved
include government support to enhance financial capital, fair input markets and
infrastructure development in agricultural potential rural areas and possibly the
establishment of intermediary institutions which can assist farmers in various aspects of group management and activities.