Financing smallholder farming has been one of the major concerns of Kenyaâs development efforts. Many credit programs have evolved over the years but with dismal performance. In a study that sought to find the best way to fund smallholder agriculture, it became necessary to analyze and document smallholdersâ effective demand for credit. Of particular interest was the comparison of the existing production plans and production plans under strictly profit maximization. Linear programming model was used to formalize observed plans and determine those under profit maximization. Both the activities and the values of outputs under different objectives were compared. Farm Investment Analysis was undertaken to determine the suitability of funding farm activities through credit. The study was undertaken in selected zones of Murangâa and Kisumu districts, being typical smallholder areas. Sample farmers were visited and structured questionnaires administered to cover farm events and physical resources of short rains 1995 and long rains 1996. This formed a basis of formulating the farm plans. Ten years down the road, objectives of smallholders have not changed as have been observed during outreach programs. The results showed that: (i) farmersâ activities in the observed plans were different from those under strictly profit maximization; (ii) the observed plans had significantly lower profit than those under profit maximization; and (iii) meeting constraints through credit was only feasible when the objective was profit maximization. Smallholder agriculture, characterized by subsistence production, does not exhibit effective demand for credit, and funding it therefore requires means other than the competitive market.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Length: Date of creation: Nov 2008 Date of revision: Handle: RePEc:ags:aaae07:52083
Contact details of provider: Postal: c/o FORMAT, 5th Floor, Muthaiga Mini Market, Limuru Road, P.O. Box 79 - 00621Village Market, Nairobi, Kenya Phone: 254 20 6752866 Email: Web page: http://www.aaae-africa.org More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: (AgEcon Search).