Estimating the supply response of Kenya's small-scale coffee production to real producer prices
Continued economic growth and reliance on small scale coffee productions has come under threat owing to the numerous fluctuations in price of coffee and marketing difficulties farmers face through the various marketing organizations. Coffee production in the country has also been observed to be on the decline. Estimating the supply response to real producer price is important in finding a solution to the problem of reduced coffee production. An understanding of coffee farmers' responsiveness to price and non prices factors is sought in this study so as to come up with appropriate policy formulation. A review of literature was undertaken to serve the purpose of informing the extent of relationships between variables and previous studies evaluating small scale coffee farmers' responses to these factors. The study used secondary data to gather information that was analysed using the Nervlove model with the help of reviews. The analyses observed that all the OLS assumptions were met in order to carryon with interpretation of the findings. From the data analysed it was established that price of coffee, price of beans, technological advancements, and the amount of coffee production achieved had a positive impact on coffee output while, annual average rainfall and the changes in government policy were observed to have a negative influence on the area allocated for coffee production. This study recommends that policy formulation be directed towards training the small-scale farmers to improve their skills. Adopting improved farming technologies and government support to farmers in terms of input subsides is also recommended as necessary policy measures in order to increase the small-scale farmers' responsiveness to price and non-price factors in their production process.