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The Impact of State Marketing Board Operations on Smallholder Behavior and Incomes: The Case of Kenya

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  • Mather, David
  • Jayne, Thomas S.

Abstract

Marketing boards and strategic reserves have re-emerged over the last decade as significant actors in grain markets in eastern and southern Africa, yet there is little empirical research regarding how their activities affect smallholder behavior. This paper uses panel survey data from 1997-2007 on Kenyan smallholders to investigate the effect of Kenya’s National Cereal Produce Board activities on farmgate maize price expectations, output supply, and factor demand. Results show that the NCPB pan-territorial price has a positive effect on smallholders’ maize price expectations, and that smallholders respond to higher expected maize prices by increasing maize production through increased fertilizer use.

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Paper provided by International Association of Agricultural Economists in its series 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil with number 131056.

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Date of creation: 2012
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Handle: RePEc:ags:iaae12:131056

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Keywords: Marketing boards; supply response; Africa; Food Security and Poverty; International Development; Marketing; Q12; Q13;

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  1. Elliot Mghenyi & Robert J. Myers & T.S. Jayne, 2011. "The effects of a large discrete maize price increase on the distribution of household welfare and poverty in rural Kenya-super-1," Agricultural Economics, International Association of Agricultural Economists, vol. 42(3), pages 343-356, 05.
  2. Jayne, T. S. & Govereh, J. & Mwanaumo, A. & Nyoro, J. K. & Chapoto, A., 2002. "False Promise or False Premise? The Experience of Food and Input Market Reform in Eastern and Southern Africa," World Development, Elsevier, vol. 30(11), pages 1967-1985, November.
  3. Bratton, Michael & Mattes, Robert, 2003. "Support for Economic Reform? Popular Attitudes in Southern Africa," World Development, Elsevier, vol. 31(2), pages 303-323, February.
  4. Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
  5. Krueger, Anne O, 1996. " Political Economy of Agricultural Policy," Public Choice, Springer, vol. 87(1-2), pages 163-75, April.
  6. Burke, William J. & Jayne, Thomas S. & Freeman, H. Ade & Kristjanson, Patricia, 2007. "Factors Associated with Farm Households’ Movement Into and Out of Poverty in Kenya: The Rising Importance of Livestock," Food Security International Development Working Papers 54563, Michigan State University, Department of Agricultural, Food, and Resource Economics.
  7. Masters, William A. & Nuppenau, Ernst-August, 1993. "Panterritorial versus regional pricing for maize in Zimbabwe," World Development, Elsevier, vol. 21(10), pages 1647-1658, October.
  8. Zhiying Xu & William J. Burke & Thomas S. Jayne & Jones Govereh, 2009. "Do input subsidy programs "crowd in" or "crowd out" commercial market development? Modeling fertilizer demand in a two-channel marketing system," Agricultural Economics, International Association of Agricultural Economists, vol. 40(1), pages 79-94, 01.
  9. Cragg, John G, 1971. "Some Statistical Models for Limited Dependent Variables with Application to the Demand for Durable Goods," Econometrica, Econometric Society, vol. 39(5), pages 829-44, September.
  10. Jacob Ricker-Gilbert & Thomas S. Jayne & Ephraim Chirwa, 2010. "Subsidies and Crowding Out: A Double-Hurdle Model of Fertilizer Demand in Malawi," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(1), pages 26-42.
  11. Nerlove, Marc & Fornari, Ilaria, 1998. "Quasi-rational expectations, an alternative to fully rational expectations: An application to US beef cattle supply," Journal of Econometrics, Elsevier, vol. 83(1-2), pages 129-161.
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