Analysing the supply response of wheat in Kenya: a time series approach
Nguyo, Elizabeth W
MetadataShow full item record
The annual rate of food production has fallen over the years in Kenya. This has resulted into food shortages, sometimes culminating in famine situations. In order to assuage this situation, there is need to explore ways of increasing food production. Wheat is one of Kenya's staple food crops and is grown by both large and small scale farmers. Due to the fact that wheat is one of the main staple food among Kenyans, its production has gained a lot of emphasis since failure to produce enough wheat would mean that food security is threatened. This research project analyzes the determinants of wheat production in Kenya for the period 1968-2008. The study focuses on both the price and non price factors influencing wheat production including the exchange rate, macro-economic environment, credit to the agricultural sector, time trend, political climate, wheat producer prices, prices of competing crop and the weather. An error correction model was used to analyze the long-run and short-run effects of various factors determining wheat production. The study found real exchange rates, access to credit and public investment in agriculture to be insignificant both in the short-run and in the long-run. The producer prices of wheat, weather, maize producer prices, time trend and macro-economic environment were all found to be significant in explaining wheat supply response in Kenya. The study recommends a compatible and integrated policy regarding the provision of input subsidies and enhanced support for the agricultural sector to improve production. To sustain wheat production, an improvement in the institutional framework and policy environment is necessary.