Willingness to pay for improved maize seeds among smallholder farmers : a study of the input factor market in Kenya

Sammanfattning: Kenya is considered to be a developing country. This means that basic needs such as nutrition are not met for an extended period of time (www, Sida 1, 2012). Approximately half of the population is living under the poverty line (www, CIA 1, 2012). Agriculture is the largest sector in the country, employing 75% of the population. These are thereby directly dependent on the sufficiency of outputs received. This makes efficient, easy-accessible and cheap agricultural practices an important matter in order to improve food security. Maize is the prime staple food commodity in Kenya and represents a substantial share of people’s nutritional intake. It exist a number of improved maize seeds on the market, that grow plants with a better pest resistance and provides a higher yield for the farmers. This study is the result of questionnaire based interviews with 52 small scale Kenyan farmers. The study was located to two separated areas; Bondo in western Kenya, and Kibugu in central Kenya. The questionnaire captured the farmers’ use and perceived importance of the use of soil-fertility enhancing practices and improved seeds. Willingness to pay for two types of improved maize seeds was measured through a payment card. It was required to use different seeds for the two areas due to diverse climate conditions. Through the results a number of factors was determined that decides how farmer choose which practices to use. Those were familiarity, monetary cost, accessibility, time consumption and social acceptance. Practices that already were used to a large extent received high importance while expensive and time consuming practices received low importance. Farmers have constraints in their production which sometimes prevent them from using the practices wished for. These are mainly time, money and for Kibugu also the amount of land. The Willingness to pay for the seeds was 98 Kenya Shillings per kilogram for Kibugu and 87 for Bondo. Both these amounts are significantly lower than the market price for improved seeds at the spring of 2012 (~175-200 KSH/kg). Farmers stated that the high price prevented them from purchasing as much seeds as wished. This indicates that the market price is too high. There are few actors on the seed market in these rural areas which enables the suppliers to exercise market power, in this case by setting a price above equilibrium. An increased competition would lead to price reductions and a higher consumption which could benefit the farmers and help secure food safety in Kenya. A regression was made over the correlation between the willingness to pay for improved seeds and the use of other input factors. Farmers that already use other inputs such as animal manure, hired labor and chemical fertilizer should also have a demand for improved seeds according to Liebig's law of minimum and expansion path theory. The regression showed that income, the use of chemical fertilizer, animal manure and crop residues have a positive effect on willingness to pay, whilst hired labor have a negative effect.