Market Liberalization and Agricultural Intensification in Kenya (1992-2002)

This study analyses the impact of the liberalization on the intensification of maize production in Kenya. It first analyses the impact of liberalization on input and output prices, followed by an analysis of farmer practices comparing two major farmer surveys, from 1992 and 2002. The results show that liberalization has had a general positive impact on the evolution of prices, with a decrease of input/output price ratios. However, fluctuations of maize prices has become very high and, combined with a decrease of marketing by the marketing board, has increased the uncertainty in maize production. The liberalization has also resulted in a decrease in extension services. Fortunately, farmers have an increased access to credit services. The combined effect of prices and access to services has resulted in little change in the number of farmers using new maize technologies, in particular improved varieties and fertilizer. The dose of fertilizer per ha has, however, decreased. As a result, yields have not increased. The analysis also showed that credit and extension have a major effect on adoption and, indirectly, on yield. The results indicate that an effort is needed to improve extension access. While the improved access to credit is encouraging, more than half the farmers still miss this essential service. Finally, the increased price fluctuation and market uncertainty should be addressed through improved use of price buffer mechanisms. Market access can also substantially be improved through investment in infrastructure