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The effects of NCPB marketing policies on maize market prices in Kenya

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Listed:
  • T. S. Jayne
  • Robert J. Myers
  • James Nyoro

Abstract

The Government of Kenya pursues maize marketing policy objectives through the National Cereals and Produce Board (NCPB), which procures and sells maize at administratively determined prices, and stores maize as a contingency against future shortages. A private sector marketing channel competes with the NCPB. This article estimates the effects of NCPB activities on the historical path of private sector prices in Kenyan maize markets between 1989 and 2004. The analysis is carried out using a reduced form vector autoregression model (VAR) estimated with sparse data and imposing only minimal identification restrictions. Results show that NCPB activities have stabilized maize market prices in Kenya, reduced price levels in the early 1990s, and raised average price levels by roughly 20% between 1995 and 2004. Over the past decade, the price‐raising activities of the NCPB have transferred income from urban consumers and a majority of small‐scale farm households that are net buyers of maize to a relatively small number of large‐ and small‐scale farmers who are sellers of maize.

Suggested Citation

  • T. S. Jayne & Robert J. Myers & James Nyoro, 2008. "The effects of NCPB marketing policies on maize market prices in Kenya," Agricultural Economics, International Association of Agricultural Economists, vol. 38(3), pages 313-325, May.
  • Handle: RePEc:bla:agecon:v:38:y:2008:i:3:p:313-325
    DOI: 10.1111/j.1574-0862.2008.00302.x
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    References listed on IDEAS

    as
    1. Nyoro, James K. & Kirimi, Lilian & Jayne, Thom S., 2004. "Competitiveness of Kenyan and Ugandan Maize Production: Challenges for the Future," Working Papers 202669, Egerton University, Tegemeo Institute of Agricultural Policy and Development.
    2. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119, Decembrie.
    3. Nyoro, James K. & Kiiru, M.W. & Jayne, Thom S., 1999. "Evolution of Kenya's Maize Marketing Systems in the Post-Liberalization Era," Working Papers 202679, Egerton University, Tegemeo Institute of Agricultural Policy and Development.
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