Institute for Development Studies, University of Nairobi

The paper examines the performance record of 17 agricultural parastatals, from independence to 1984. Data is presented showing capital invested, liquidity and gearing ratios, private and social returns to capital, real unit costs and real consumer and producer prices. Firms are classified as to which ones have had serious problems with cost control or social rates or return, and when those problems developed. About half of the firms currently operating are considered "good" performers. The data show that for most firms cost control problems preceded financial problems, and that pricing policies have not been a major cause of parastatal financial problems. Since 1976 several firms have developed severe financial problems, while before 1976 no firm had such severe problems. Efforts to restore cost control after serious problems developed have rarely succeeded. Current policies of government are aimed at increasing central government control of all aspects of operations of all parastatals, a strategy which is not likely to succeed.