Market Participation among Poor Rural Households in Kenya

Kenya’s smallholder agriculture remains a major engine of rural growth and livelihood improvement, yet it is largely semi-subsistence. Therefore, any pathway that can lift large numbers of the rural poor out of poverty will require some form of transformation of smallholder agriculture into a more commercialized production system. This study used a three-year panel household data set collected in 2000, 2004 and 2007 and across nine agroecological zones of Kenya to assess the extent of market participation among poor smallholder farmers in Kenya with a view to identifying constraints to market participation among and potential market opportunities for the poor. Descriptive results reveal differences in market participation across selected commodity groups among poor and non-poor households, with poor households having generally lower market participation. Some characteristics of the poor households that could partly explain this low market participation include low literacy levels, small land sizes, low asset values, low access to credit and limited ability to produce surpluses for the market. In terms of factors that could enhance market participation for poor households, we find that land size and membership in farmer organization play significant roles. These results suggest that any hope for the poor to participate in markets and make any meaningful gains from agriculture lies in improving productivity of their land as well as improving their access to land. Increasing social capital through promotion of collective action among poor households can also be of great value in enhancing their access to markets