| dc.description.abstract | Most smallholder cropping systems in Africa face the challenge of declining food production
and productivity. This has been attributed to the problem of soil nutrient depletion, which is
more acute in highly populated areas due to continuous cropping. The use of chemical
fertilizers to address soil-fertility has been hampered by their high prices following market
liberalization. This study was carried out with an over-all objective of analyzing the financial
and social profitability of agro-forestry based (improved tree fallows and tithonia biomass
transfer) and other soil fertility management technologies for smallholder food production in
western Kenya. Financial profitability (net private profitability) refers to the difference between
total revenues and total costs valued in observed market prices. This concept was used to show
whether individual farmers have financial incentives to intensify the use of the soil fertility
management technologies being studied. Social profitability (net social profitability) on the
other hand, refers to the difference between total revenues and total costs valued in efficient
(social) prices. This concept was used as a measure of whether resources in the region were
being used efficiently to produce food under the technologies of interest.
The study was carried out in Vihiga and Siaya districts of western Kenya while a two stage
sampling was used to sample a total of one hundred and twenty farmers (120) who were
interviewed using pre-tested structured questionnaires. The Policy Analysis Matrix (PAM) was
used to analyze the competitiveness of the above said technologies and also modified
accordingly to accommodate the analysis of the impact of transaction costs on competitiveness.
Transaction costs refers to the various costs, both monetary and non-monetary other than prices
incurred to conduct a market exchange. The transaction costs considered were; use of nonxi
standard measures for output, presence of impurities in maize and bean seeds and the
opportunity cost of time spent searching for improved fallow seeds. Farm budgets were
constructed for each production system and used to construct the PAMs. Improved fallows
were considered with respect to food production (maize and beans) while lithonia biomass
transfer (which is labour .intensive) was considered with respect to the production of a high
value crop, in this case kales (sukuma wiki).
Results showed that the most economically competitive technology with respect to the
production of kales was the use of lithonia biomass transfer in combination with some chemical
fertilizers. This combination gave the highest (Ksh 10,117) Net Private Profitability (NPP) and
also the highest (Ksh 11,206) Net Social Profitability (NSP). Thus, the high NPP give farmers
financial incentives to intensify the use of above said technology set. Similarly, the high NSP
implies that farmers in the region who use lithonia biomass in kale production are using the
resources at their disposal (land, labour and capital) efficiently. In food production, the most
economically competitive technology was the combination of chemical fertilizers with
improved fallows. This technology gave a NPP and NSP of Ksh 10,038 and Ksh 7,370
respectively. The analysis of the impact of transaction costs on social profitability of the food
production systems indicated that those costs did not significantly (5%) impact the profitability
level. This was also supported by the sensitivity analysis on social profitability. However, in
relative terms the less the profits the more the impact from transaction costs and vice versa.
Specifically, transaction costs emanating from poor seed quality and opportunity cost of time
spent on searching for improved fallow seeds were Ksh 26 and Ksh 25 respectively. These
costs from these two sources were constant because the seed rate was the same across
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production systems (10 kg/ha and 13.5 kg/ha for maize and beans respectively) and the average
time spent searching for improved fallow seeds was 2 hours. Transaction costs from the third
source (use of non-standard measures for output) considered in this study were directly
proportional to the amount of output, that is Ksh 0.7/kg of maize and Ksh l. 9/kg of beans.
The study recommended the promotion of using a combination of tithonia biomass transfer
with "some" chemical fertilizers, which was the most financially (Ksh 10,117) and socially
(Ksh 11,206) profitable technology for small-scale kale production. In this case, encouraging
farmers to grow tithonia around their farms could reduce transport costs associated with use of
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biomass transfer hence increasing its profitability. Use of "some" fertilizers would be more
feasible in kales production because the proportion of the whole farm under kales relative to the
one under food was small. To improve on accessibility of chemical fertilizers, it was
recommended that fertilizers be repackaged into smaller amounts like 300g, 200g and even
100g which are affordable to farmers.
For food production, the study recommended use of Farm Yard Manure (FYM) , alone which
ranked second in terms of social profitability (KSh 6,977) and third in terms of financial
profitability (Ksh 9,729). As opposed to FYM, Use of improved fallow trees entails for-going
yields for a whole season, which does not augur very well with resource poor farmers earning
an average of one dollar per day. On Transaction costs, it was recommended that market
institutions be strengthened. This would entail having a universally agreed and acceptable
standard measure for output across sellers.
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