Measurement and sources of multi-factor of productivity in Kenyan agriculture: 1964-1989

Abstract

The twofold purpose of this study was to construct a multi-factor productivity index for Kenyan agriculture and to analyze the factors responsible for this productivity change. A partial productivity index for the Kenyan agricultural labour was also constructed. The period covered by the study was 1964 to 1989; the time following Kenya's independence. The data used for the study were collected mainly from Kenya with supplementation from international sources. The multi-factor productivity and the partial productivity of labour indices were constructed using the Laspeyres indexing procedure. Productivity index results revealed that Kenyan agricultural productivity has remained generally stagnant since 1964. However, slight growth was observed over the earlier period covering 1964 to 1978. From 1979, there has been a declining trend in productivity. Analysis of the productivity measures shows that labour and multi-factor productivity results were quite similar, mainly because labour represents a large proportion of total inputs used in agricultural production. The log-linear functional form was used to regress the multi-factor productivity index against identified factors contributing to this productivity change. The results showed that research and support services, education level of farmers and weather were not statistically significant. The importance of estimating and evaluating the sources of productivity growth lies in information gained for agricultural policy formulation.