Commercial and subsistence Farming: What is the future for smallholder Kenyan agriculture?

Abstract

Smallholders in Kenya have traditionally made important contributions to food security by producing most of their own food. They are, however, resource poor and, therefore, produce below optimum. In addition, the challenges of globalisation and liberalisation increasingly require that producers compete in the markets, both local and international. This proposes commercialisation of agriculture, even in the small farms. The objective function of the commercial farmer is profit maximization while that of the subsistence farmer is producing food for the family. That of the semi-commercial farmer is profit maximization subject to withholding enough resources for use in subsistence production. Farmers are known to be supply responsive and are, therefore, expected to adopt commercial agriculture, but many smallholders have continued in their semi-commercial and subsistence modes. This article builds on previous research by hypothesising key pathways by which the objective function and resource regimes may affect total output, using the case of smallholder farmers in Kenya. The data used is from a survey of 238 smallholder farm households between 1995 and 1996. Analysis is based on comparing values of output under different objective functions and resource regimes, and assessing their reality and viability. Results confirm that the monatory value of commercial agriculture is significantly higher than that of semicommercial agriculture. The reality, however, is that most smallholders are semi-commercial (or semi-subsistence) farmers. Farm investment analysis is carried out to assess the viability of increasing non-land resources. The Results indicate economic viability in very few cases. Results of a risk analysis indicate that risk averse farmers will put more effort in food production than will less risk averse ones. The study acknowledges the potential significance of commercial agriculture and the indispensability of subsistence agriculture in smallholder circumstances. Smallholder farms could be made to prosper in the future by enhancing food sovereignty and improving markets of non-food commodities.