Expanding the Agricultural Finance Frontier: A Kenyan Case

Agriculture is the mainstay of the Kenyan Economy. However, agriculture has experienced low productivity over the years. Poor access to agricultural finance has been identified as a contributing factor to low crop productivity. Kenyan agriculture has undergone some fundamental changes which have profoundly affected agricultural financial services. In addition, most financiers shy away from lending to the agricultural sector because of the covariant risks related to rain-fed agriculture. Given this background, we undertake a comparative analysis of emerging models of agricultural finance that have expanded the agricultural finance frontier to the smallholder farmers. Key findings indicate that demand for farming credit takes the highest proportion of the credit needs among the rural households, thus accentuating the importance of agricultural finance. The state run model of agricultural financing has the lowest financial sustainability. On the contrary, the community financing models are the most likely drivers of change in the rural finance landscape.Agribusiness, Agricultural Finance, Community/Rural/Urban Development, Demand and Price Analysis, Farm Management, Financial Economics, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, Institutional and Behavioral Economics, International Relations/Trade, Labor and Human Capital, Land Economics/Use, Marketing, Production Economics, Productivity Analysis, Research and Development/Tech Change/Emerging Technologies,

Interlinked Credit and Farm Intensification: Evidence from Kenya

This paper addresses the potential for interlinked credit/input/output marketing arrangements for cash crops to promote food crop intensification. Using panel survey data from Kenya, we estimate a household fixed-effects model of fertilizer use per hectare of food crops. Results indicate that households engaging in interlinked marketing programs for selected cash crops applied considerably more fertilizer on other crops (primarily cereals) not directly purchased by the cash crop trading firm. These findings suggest that, in addition to the direct stimulus that interlinked cash crop marketing arrangements can have on small farmer incomes, these institutional arrangements may provide spillover benefits for the productivity of farmers' other activities such as food cropping.Agricultural Finance,

Competitiveness of Kenyan and Ugandan Maize Production: Challenges for the Future

The purpose of this study is to assess the costs of maize production in Kenya and Uganda, starting from the fact that there is no single “cost of production” for maize. Cost of production varies according to region, the type of technology package employed, farmers’ management practices, and the weather. In light of this, the study disaggregates cost of production into seven region/technology categories, five in Kenya and two in eastern Uganda, in order to compare the relative competitiveness of maize among these regions and technology packages. Variations in cost of production within each region/technology category reflect differences in farmer management practices and micro-variability in soils and rainfall.Food Security, Food Policy, Kenya, Uganda, Maize Production, Crop Production/Industries, Q18,

Trends and Patterns in Fertilizer Use by Smallholder Farmers in Kenya, 1997-2007

This study uses nationwide household panel survey data from 1996/97 to 2006/07 to examine trends in fertilizer use on maize by smallholder maize growers. The paper also compares these findings with fertilizer use rates according to other recent surveys in Kenya to assess comparability. We also examine the correlation between household fertilizer use and indicators of welfare such as wealth and landholding size. In addition, we use econometric techniques applied to household survey data to identify the main household and community characteristics associated with fertilizer purchases. Lastly, the study considers alternative policy strategies for maintaining smallholders’ access to fertilizer in the current context of substantially higher world fertilizer prices.Fertilizer, Africa, Malawi, Kenya, Small Holders, Crop Production/Industries, Q13,

Effects of Agricultural Commercialization on Food Crop Input Use and Productivity in Kenya

Crop Production/Industries, Downloads July 2008 - July 2009: 23,

Effects of Agricultural Commercialization on Food Crop Input Use and Productivity in Kenya

The objective of this report is to analyze the effects of smallholder commercialization on food crop input use and productivity in rural Kenya. The main research issues were: (1) To examine the determinants of smallholder fertilizer use on food crops, with a focus on the effects of household and regional agricultural commercialization; (2) To examine the determinants of food crop productivity, again with a focus on the effects of commercialization; and (3) To discuss the implications of the findings for policy and additional research necessary to improve the contribution of cash cropping to rural food productivity growth and food security. A main premise of the paper is that the effects of commercialization are not uniform and cannot be generalized. The effects are hypothesized to differ both according to differences in the institutional/contractual arrangements between firms and smallholders, management decisions, and the level of credit and extension support provided to smallholders by the various private and parastatal firms involved in promoting smallholder cash crops.food security, food policy, food crop productivity, food crop input, Crop Production/Industries, Productivity Analysis, Downloads May 2008 - July 2009: 78, Q18,