| dc.description.abstract | Maize production in Kenya has fluctuated over the years as a result of climatic conditions
and policy constraints. The pricing and marketing policies used for maize in Kenya have
shifted over the years. During the colonial era and the independent period up to 1980, the
policies emphasised direct government controls on prices and marketing for maize. With
reference to prices, it set prices in a bid to encourage farmers to increase maize
production. With regard to marketing, it controlled the marketing system completely and
legally - its main agent was the National Cereals and Produce Board (NCPB). These
have been gradually liberalised since 1980. From 1980 to 1992, the implementation of
the reforms has been an on-and-off affair. It was in 1986, that the government officially
spelt out the wide range of the policy reforms to be undertaken. Significant
implementation of the reforms in the maize sub-sector began in 1993. All restrictions on
maize movements and trade were removed with effect from the 1995/1996 season.
The policies before the reforms led to poor seasonal and regional integration of the maize
market, fluctuations in prices, and disincentives to increased maize production. However,
even after the implementation of the reforms, maize production in Kenya continued to
decline. As such the government has been importing maize during periods when the
supply could not meet the demand. For instance, in 1992, 1993 and 1994, the country
imported 414926, 12874 and 650 387 tons of maize, respectively.
Using 1996 as the base year, this study was undertaken to determine the extent to which
policy (input and output pricing policies) and market related factors affect maize
production and producer incentives in Trans-Nzoia district. The other objectives were to
determine the farm-level competitiveness of maize production as compared to wheat and
sunflower, to determine the efficiency of maize production and to simulate the likely
effects of exchange rate and producer price changes on maize production.
Using the Policy Analysis Matrix (PAM) methodology, the study found that there were
disincentives for maize production. The private producer price had been depressed by 23
percent relative to its social equivalent in 1996. However, all the production systems
studied (large and small-scale maize, wheat, and sunflower) were competitive.
The social profits for the maize systems were positive. Social profits are a measure of
efficiency. The large-scale system was more efficient than the small-scale system. The
implication is that - subdivision of large-farms is detrimental to efficient production of
maize. Since small-scale maize production is dominant in Kenya, the study recommended
intensified use of intermediate inputs such as fertilizers to increase the yields currently
observed on these farms.
Simulation of the exchange rate by a further 10 percent devaluation increased the social
profits for all systems of maize production and thus efficiency in maize production.
However, it would not create incentives for increased maize production given that its
effect is only through the tradable inputs and output, ignoring the domestic factors.
To create incentives therefore, requires combined forces that would have effects in the
tradable inputs and outputs and also in the domestic factors of production.
A free maize market is likely to result in maize producer price fluctuations from one
season to another and also from year to year. The price variations would result in
production fluctuations. The study recommended that the NCPB should actively play its
role of market stabilisation. In this case the NCPB would act as a buyer and seller of last
resort in a bid to stabilise prices within a floor and a ceiling band representing acceptable
price variations. | en |
