Determination of economic competitiveness and optimal resource allocation in rainfed rice production on smallholder farms: the case of Amukura division, Busia district, Kenya
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Research on rainfed rice production and its competitiveness on Smallholder farms of Amukura Division of Busia District was carried out in February, March and April 1991. The data were collected using a structured questionnaire which was administered to fifty farmers. The specific objectives of the study were:- (i) To describe the farming system in which rainfed rice farming is found and to determine the various farm resources available to rainfed rice producers. (ii).To determine the relative profitability of rainfed rice production vis-a-vis other competing enterprises. (iii)To find out if rainfed rice could feature in the optimal farm plans. The analytical methods used to achieve the above objectives were Gross Margin Analysis and Linear Programming. The results of the study showed that rainfed rice was excluded from the optimal farm plans for the large and aggregated farm models; rice was included in the optimal plan for the small rice farm model, but at a relatively low hectarage of about 0.18. Parametric Linear Programming showed that for rice to be profitably produced and be included in the optimal farm plans substantial increases in producer prices of paddy rice would have to be effected by the Government. Also for the farmers to put at least 1 ha under rice, which is being aimed at by the LBDA and Ministry of Agr icul ture, price alone is not sufficient. The sensitivity analysis results showed that when price is increased to Ksh.8 about 0.88 ha will be planted and also when price is at Ksh.l0 still -0--.--8-8- ha will be put under rice. Hence other factors of production as well as favourable prices will have to be looked into if rainfed rice productions is to be improved. The results of the analysis,of non-rice farm models showed that cotton grown in the second season, maize grown in the second season and cassava were the most profitable enterprises in the optimal farm plan for the small non-rice farm model. On the large and aggregated non-rice farm models, cassava, maize grown in the first season and sorghum gr9wn in both the first and second seasons were the most profitable enterprises. The study concludes that rainfed rice is unprofitable to produce at the prevailing economic conditions in the Amukura area. The study recommends that: (i) the government should increase the producer price of rice. (ii) ways should be found to ease the operating capital constraint by offering short term credit to farmers in the study area. (iii) the extension staff should develop optimal plans for the non-rice farms of this area. This will enable farmers to optimize resource use. (iv) price increases alone are not sufficient to increase rice output as shown by the results of the sensitivity analysis. Therefore, farmers should be educated on modern ways of rice production.
CitationDEGREE OF MASTER OF SCIENCE IN AGRICULTURAL ECONOMICS.
University of NairobiDepartment of Agricultural Economics