EFFECTS OF MAIZE’S PRICE INSTABILITY ON INCOME LEVELS AND

HOUSEHOLDS LIVES IN MATHIRA DISTRICT, NYERI COUNTY

BY

HENRICK WAHOME MURIITHI

A Research submitted to the Department of Agricultural Economics and Agribusiness

Management of the partial fulfillment for the award of the Degree in Bachelor of Science,

Agricultural Economics of Egerton University

May 2014

ii

DECLARATION AND APPROVAL

Declaration

This is my original work and has not been presented in this or any other university for award of

degree

Signature……………………………………….. Date………………………….……..

Henrick Wahome Muriithi.

K18/10030/10

Approval

This project has been prepared and submitted with my approval.

Signature……………………………………….. Date………………………….……..

Prof. Margret Ngigi.

Department of Agricultural Economics and Agribusiness Management

Egerton University

iii

COPYRIGHT

©2014

Henrick Wahome Muriithi

All rights reserved. No part of this publication may be translated, reproduced or transmitted in

any means, electronic or mechanical including photocopying, recording or information storage

and retrieval system or otherwise without the prior written permission of the author or Egerton

university on my behalf.

iv

DEDICATION

This research project is dedicated to The Almighty God for The grace and mercy He has given

me to this far. To my beloved parents, brothers, and sisters whose prayers and unending support

has brought me this far. Also my course mates for their intellectual support, co-operation and

guidance

v

ACKNOWLEDGEMENT

First and foremost I would like to thank Almighty God for care, protection and provision

throughout my studies. I wish to pass my sincere gratitude to Egerton University for giving me

the opportunity to pursue my undergraduate degree. I appreciate the contribution of the entire

staff of the Department of Agricultural Economics and Agribusiness Management of Egerton

University for helping me achieve my academic goals in this degree program. I am greatly

indebted to my Supervisor Mr. Nixon Murathi under Prof. Ngigi for his guidance, assistance,

encouragement and concern for. He paid attention to detail and was available to patiently read

and offer his constructive criticism on my project work. I acknowledge the support offered by

my group members and fellow classmate Mr. Donald Mugambi and all my friends and family

members for granting me the atmosphere to work on the project. May God Bless you all

abundantly.

1

ABSTRACT

Maize farming is a major economic activity among many smallholder farmers in many

parts of Kenya. It is of great importance especially to farmer in Mathira District in Nyeri County.

However, lives of most farmers in the district have not been pushing on well; standards of living

of most farmers in the areas have been on a decline trend. This is so because of the price

instability of the maize in the market thus affecting the farmers negatively in the area. A decline

in most cases of the prices of maize has had negative effects on the lives of the farmers in the

area. This has been subjecting them to daily losses despite giving all their efforts on maize

production in the hope of a better return. Where prices have been increasing though not in many

instances, farmers in the area have not been smiling since that has been off setting the losses

incurred from a decline in the prices. The main purpose of this study is to examine the effects of

the high variations of the prices of maize on income levels of the farmers in area and effects of

that variation on their lives. This would be done through a qualitative and quantitative analysis of

maize production potentials of farmers, family sizes of the farmers, education levels and

adoption rates of storage facilities.1 The specific objectives of the study are: To determine the

role of market choices in variation of maize prices in Mathira District, to determine the role of

storage facilities for maize grains after harvest in the variations of maize prices in Mathira

District and to determine the implication of market centres locations in the variations of prices of

maize in Mathira District.

2

TABLE OF CONTENTS

DECLARATION AND APPROVAL .......................................................................................... ii

DEDICATION.............................................................................................................................. iv

ACKNOWLEDGEMENT ............................................................................................................ v

ABSTRACT ................................................................................................................................... 1

TABLE OF CONTENTS ............................................................................................................. 2

LIST OF FIGURES ...................................................................................................................... 5

LIST OF ABBREVIATIONS AND ACRONYMS .................................................................... 6

1.1 Background information ....................................................................................................... 7

1.1 Statement Of The Problem ............................................................................................... 9

1.2 Objectives ....................................................................................................................... 10

1.3.1 General Objective ................................................................................................... 10

1.3.2 Specific Objectives ................................................................................................. 10

1.3.3 Research questions .................................................................................................. 10

1.3.4 Justification of the Study .............................................................................................. 10

1.3.5 Scope and Limitation of the Study ............................................................................... 11

CHAPTER TWO ........................................................................................................................ 12

LITERATURE REVIEW .......................................................................................................... 12

2.1 Theoretical Framework .................................................................................................. 17

2.2 Conceptual Framework .................................................................................................. 18

CHAPTER THREE .................................................................................................................... 21

Methodology ............................................................................................................................. 21

3.1 Area Of Study .................................................................................................................. 21

3.2 Population Under Study................................................................................................... 21

3

3.3 Sample And Sampling Size ............................................................................................. 22

3.4 Instrumentation And Data Collection .............................................................................. 22

3.5 Data Analysis ................................................................................................................... 23

CHAPTER FOUR ....................................................................................................................... 24

RESULTS AND DISCUSSION ............................................................................................... 24

4.1 Introduction ................................................................................................................ 24

4.2 Questionnaire response rate ........................................................................................ 24

4.3 Relationship between demographic characteristics of the maize farmers and prices of

maize variation ...................................................................................................................... 24

4.3.1 Distribution of farmers by Gender .......................................................................... 24

4.3.2 Age distribution of the farmers ............................................................................... 25

4.4 Size of land portions set for maize production ........................................................... 25

4.5 Farmer’s market choices for his / her maize............................................................... 26

4.6 Storage of maize and storage ...................................................................................... 27

4.7 Location of market centres ......................................................................................... 28

CHAPTER FIVE ........................................................................................................................ 30

CONCLUSION AND RECOMMENDATION .................................................................... 30

5.1 Conclusion .................................................................................................................. 30

5.2 Recommendations .......................................................................................................... 30

REFERENCES ........................................................................................................................ 32

APPENDIX .............................................................................................................................. 35

RESEARCH QUESTIONNAIRE ............................................................................................. 35

4

LIST OF TABLES

Table 1: Gender of the respondent ................................................................................................ 25

Table 2 : Age of Respondent ........................................................................................................ 25

Table 3 : Size of land portions set for maize production .............................................................. 26

Table 4 : Farmer’s market choices for his / her maize .................................................................. 27

Table 5: Storage of maize and storage .......................................................................................... 28

Table 6 : Location of market centers ............................................................................................ 29

5

LIST OF FIGURES

Figure 1: An illustration of factors contributing to stable maize prices. ..................................... 19

6

LIST OF ABBREVIATIONS AND ACRONYMS

EAC East African Community

ESA Eastern and Southern Africa

FAO Food and Agriculture Organization

FRA Food Reserve Agency

GDP Gross Domestic Product

GMO Genetically Modified Organism.

GoK Government of Kenya

MDGs Millennium Development Goals

MOA Ministry of Agriculture

NCPB National Cereals and Produce Board

SPSS Statistical Packages for Social Sciences

SSA Sub-Saharan Africa

7

CHAPTER ONE

INTRODUCTION

1.1 Background information

Agriculture is the mainstay of people in Kenya. Agriculture is considered as the backbone

of the Kenya’s economy. It is regarded as so since it contributes greatly to the Kenyan economy

in many terms; including contributing to the GDP which it accounts for 26.5%,provision of both

direct (semi-skilled) and indirect (skilled) labour to almost 80% of the Kenyan population.

Agriculture itself is a chief source of food for the Kenyan population of close to 42 million

people. Most of the agricultural production in the country is small scale and geared towards

subsistence maintenance. In Kenya most of the agriculture is localized in the rural areas as is the

practice of the people of Mathira. Kenya’s agricultural sector is both crop and livestock and

livestock products productive. Crop production involves production of both food and cash crops.

Food crops produced includes the maize, sorghum, Irish potatoes and vegetables. The major cash

crops are coffee, tea , horticultural products and flowers.

Maize is the main food crop grown in Mathira division. The widely grown varieties of

maize in Kenya are yellow and white maize. Most of the farmers in the area are small scale

farmers. Maize scientifically is known as Zeamays. It is a large grain started being domesticated

by the indigenous people in Mesoamerica in prehistoric times. It spread to the rest of the world

because of its ability to grow in diverse climates. Over 160 million hectares of maize are planted

worldwide.

In Kenya maize is the main source of food either in raw form or in processed form as

maize meal. It is ranked as third crop grown In the Kenyan agricultural sector after tea and

coffee.

Maize is the most important cereal crop in SSA and the continent produces 6.5% of the

world output. Africa consumes 30% 0f maize, Imports 28% of maize. World Wide human

consumption of the maize is more than 160 million tonnes, Africa alone 30% and SSA

21%.Eastern and southern Africa uses 85% of its maize as food while Africa uses 95% of maize.

Maize accounts for 30-50 % of low income earners expenditures in Eastern and southern Africa.

Most maize production in Kenya and in most parts of Africa is rain fed maize production, that is,

8

it is dependent on the rainfall patterns thus leading to seasonality in production of maize in these

countries. Irregular rainfall patterns can trigger famine in vulnerable regions in the continent as

has been evident in Kenya for example in the year 2010 during the Kenyans for Kenyans

campaign in the North Horn of Kenya, Turkana region being most badly hit by famine. (MoA.,

2010)

Nyeri County is in the former central Kenya region nearing Mount Kenya in the

northwest direction. The local people there are predominantly from the Kikuyu ethnicity. Maize

in Mathira District is predominantly grown by small scale farmers. These farmers mainly grow it

as a source of food for their families or as a source of income to help them cater for their

family’s needs, supplement their diet, and guarantee them a decent living. This is evident as the

income they get from sale of maize is used to buy other food items, buy clothes, build decent

living houses, access quality education and Medicare among others. Maize forms a chief source

of food for the Mathira District population and that of the Nyeri County at large. Generally, it

guarantees them improved living standards. However, most maize farmers in the region are faced

with several constraints in their efforts to produce this golden crop. These constraints are; limited

capital for maize farming, limited land capacity, or limited labour supply to work in the maize

fields. Land in the area Mathira District has been fragmented into very small units due to high

population pressure. On average each household owns about 0.64 hectares of land. Land in the

area is a highly priced factor of production but this is not the main constraint accessing more of

the land. People there are not willing to sell land anymore and where one is willing to sell the

land, the prices drives away many prospective buyers.

However, in recent times the welfare of majority of maize farmers in the region, mostly

those who have been relying heavily on maize for income provision and food source have

suffered many setbacks. These are like reduced income from the sale of maize products due to

volatility of maize prices in the market and threats of food insecurity due to recent change in

climate and rainfall patterns, reduction in income levels of households has been brought about by

the instability nature of the markets and prices of the maize product right from the world markets

up to to the division market level of Mathira District situated at Karatina town. The maize market

prices in recent times have been very volatile.

9

1.1 Statement of The Problem

The area under study has portrayed favorable climatic conditions for producing maize.

The rainfall is bimodal, long rains (March- May) and short rain (October- November) which

facilitates for maize production throughout the year and various conservation technologies have

into existence such as construction of modern grain silos, NCPB has been reaching the farmers in

the area by buying the excess maize from them and stores them on their behalf. Through this

they control supply of the maize. The rural infrastructures in the area such as roads networks,

water supply, and electricity e.g. have been implemented. Inclusively, there are ready markets for

the maize either in raw and processed forms. There are those customers who prefer raw maize,

either green maize or dry maize and there are those who prefer processed maize as maize meal.

The main market in the area is situated at Karatina town there is an open market where either

farmers themselves take their maize for sale or is taken there for sale by the middlemen. High

Schools and other learning institutions are also markets for the maize produced in the area

although most of them buy dry maize. Hospitals, hotels and restaurants are other customers of

the maize produced in the area. Maize millers such as the Arbedare Mupa Maize Millers and the

recently launched by the Nyeri county Governor Nderitu Gachagua, Dabo Maize Meal brand a

product of the Anchor Flour Millers are the other customers of the maize produced in the

District.

Despite the above market opportunities for the maize of the maize farmers in Mathira

District, Nyeri County , standards of lives of most farmers in the areas have been on a decline

trend. This is so because of the price instability of the maize in the market thus affecting the

farmers negatively in the area. A decline in most cases of the prices of maize has had negative

effects on the lives of the farmers in the area. This has been subjecting them to daily losses

despite giving all their efforts on maize production in the hope of a better return. Where prices

have been increasing though not in many instances, farmers in the area have not been smiling

since that has been offsetting the losses incurred from a decline in the prices. Thus, the purpose

of this study is to examine the effects of the instability of the maize prices in the District and

effects on the lives of the farmers in the area.

10

1.2 Objectives

1.3.1 General Objective

To examine the effects of the high variations of the prices of maize on income levels of

the farmers in area and effects of that variation on their lives.

1.3.2 Specific Objectives

1. To determine the role of market choices in variation of maize prices in Mathira

District.

2. To determine the role of storage for maize grains after harvest in the variations of

maize prices in Mathira District.

3. To determine the implication of market centres locations in the variations of

prices of maize in Mathira District.

1.3.3 Research questions

1. Do the market choices of the farmer have an influence on maize price variations?

2. Do the storage have an influence on the variations of prices of the maize in the

area?

3. Do the location of market centres lead to price of maize variations in the area?

1.3.4 Justification of the Study

The study will be beneficial to smallholder maize farmers, since the results will help on

their efforts to improve their maize production enterprises levels in producing and choosing good

market choices for their maize. This will include enlightening the farmers through an improved

and efficient extension system on how to go about selecting the on good production practices,

marketing choices, storage facilities. The maize farmers also will benefit from acquiring skills on

how to manage postharvest losses so as to maximize their net profits from the sale of their maize.

The maize farming enterprise earns a regular income which sustains the livelihood of most

small-scale households. It is also a main daily household’s diet to most people throughout the

year. The enterprise also creates employment for the rural communities at the farm levels and

off-farm employments to informal maize traders, cooperatives and other dealing with maize

marketing.

11

1.3.5 Scope and Limitation of the Study

1.3.5.1 Scope of the study

In order to obtain a reliable and comprehensive analysis, the study had to limit itself to

the smallholder’s maize farmers who rely on maize production as their main source of income

and livelihood. The study was conducted in the three wards in Mathira District ( Ruguru, Iraini

and Karatina Ward). This was done by conducting a survey through administering well-

structured questionnaires on a sample of 30 smallholder maize farmers from an estimated

population of 500 maize farmers. The questionnaire method is assumed the best method of

collecting information since it’s quicker and cheaper to administer according to Cooper and

Emory (2008).

1.3.5.2 Limitations of the study

The limitations were like; uncooperative farmers who resisted giving actual information

on the study. There are farmers who also gave false information thus leading to erroneous

conclusions. Also some farmers were only conversant in their native language and thus a need

for a translator on the filling of the questionnaire. The study was again confined to those farmers

who practice maize farming as their core business and means of livelihood.

12

CHAPTER TWO

LITERATURE REVIEW

Maize is a major grain in most African and Sub-Saharan Africa. Maize is the most

important crop in Kenya with over 90% of farming households growing maize (Pearson et al.

1995). Productivity in maize sector increased steadily from independence until the mid-1980s

(Kibaara et al, 2008) but declined between 1985 and 2004. However, (Ariga et al., 2008) found

that maize yields have improved impressively over the 1997-2007 period, partly due to increased

use of fertilizers. Fertilizer marketing costs declined substantially between mid-1990s and 2007

but the positive trends in fertilizer use were partially reversed in 2008 by civil disruption as well

as surge in global fertilizer prices (GoK, 2009).

In early 1990’s Maize and maize meal prices, which prior to policy change were set at

pan-seasonal and pan-territorial levels, were deregulated. Private traders were allowed to

transport maize across the districts without any hindrance. Prior to this policy change, they were

required to acquire movement permit for varying quantities of maize that was transported. The

reform process was expected to reduce costs in maize marketing system by encouraging mere

private sector participation in the market. (Jayne., and G. Kodhek, 1999).

Maize grain losses contribute to food insecurity and low farm incomes not only in Kenya

but also in Sub- Saharan countries. Therefore, efficient post-harvest handling, storage and

marketing can tremendously contribute to social economic aspects of rural communities in

Kenya as stipulated in Vision 2030 (Republic of Kenya, 2007). Maize losses are either

quantitative or qualitative or both. Such losses lead to lower levels of food security, hunger,

increased prices and low farm incomes (Republic of Kenya, 2004). These losses are experienced

at different stages e.g. pre-harvest time, during harvest, during shelling, during storage and

during transportation time, during transaction times at the market centres.

To meet the larger African and Kenya crisis of persistent agricultural products price

fluctuations, persistent food insecurity, nutritional deficiency, and ever enduring poverty levels,

one must turn to agricultural led growth. But based on the historical experience, an agricultural

led strategy is based on in a twenty five (25) year horizon and must entail a combination or an

integration of modern and improved technology, many, intensive and continuous innovations in

13

the agricultural sector, policy reforms and new institutional restructuring because each by itself is

a limited effort of any agency to see that the above problems are solved.

“Operation of the markets”-the determination of the commodity’s prices by the market

forces of demand and supply, these forces in turn influences the allocation of resources. (J.

Harrigan, Agricultural Price Policy, Government and Market).A markets exists whenever buyers

and sellers of a particular resource or a good freely come together leading to flow of information

which creates the opportunity for trade and exchange of goods and services. Buyers and sellers

need not to physically come together. They might be joined for example by telecommunications

networks-commerce etc. most African markets for agricultural goods involve physical contact

between buyers and sellers which gives a market a clearly defined geographical location. Most

villages have a small market where traders regularly gather. Larger markets exist in regional

centres or in urban settlements. Markets can be local, regional, national or international. (Pg. 21,

J. Harrigan, Agricultural Price Policy, Government and Market)

Agricultural productivity growth throughout history has been intimately tied to

productivity growth in marketing systems. (North., 1985). Abundant worldwide evidence has

shown that the incentives and the ability of farmers to make investments in productivity

enhancing inputs and production methods depends on reducing the transaction costs and risks of

exchange across inputs, credits and output markets. Throughout the world, the major share of

staple food crop (maize) to the consumer is typically accounted for by marketing costs. In most

countries in eastern and Southern Africa, maize marketing costs for about 40%-60% of the total

retail price of a maize meal paid by customers. (Jayne 1999). The reduction of these costs

represents a major opportunity to improve farm production incentives and simultaneously make

food more affordable to low-income consumers and mostly poor maize farmers. (James K

Nyoro, Tegemeo Institute)

Governments in East Africa region have tended to intervene heavily in markets for their

key staple food, maize both through marketing board operations and discretionary trade policy

instruments purportedly to protect producers and consumers from price risk. In effect such

incentives can be counter-productive, exacerbating the risks faced by participants in the grain

value chain not to mention customers especially the poorest among them. In East Africa maize is

the major grain. As it is a rain-fed crop annual production fluctuates strongly but in a way

14

different from country to country. Regional and International trade in maize is therefore

important in these countries to help them level out year-to-year fluctuations. The three

governments through the East Africa community have infact endorsed a “Common Maize

Market” but the implementation has failed somewhat short of the ideal. An analysis of maize

prices shows that they are very volatile but that most of the price movements are actually

predictable from past price movements. The private sectors actors should be able to adjust their

decisions in order to protect themselves from price volatility and there is a little reason from an

outside agent (for example from government) to try to act on the level of price volatility itself

(for example by market interventions). Maize markets in the region are reasonably well

integrated despite government trade interventions (indicating the strength of informal trade), with

Nairobi acting as the reference centre which price developments in other parts of the East Africa

region.

Policy interventions have been frequent in both Kenya and Tanzania where the two

governments use trade policy and marketing and market boards as tools to influence prices on

maize markets. Both countries have normally high import duties from outside the region which

are reduced or eliminated when the governments see fit and both use export bans when they feel

that there is a local maize shortage. In both countries there is a number of non-tariff barriers

(including a ban on the GMO maize) with cumbersome export/import procedures. Uganda has

stable trade policy when it comes to maize (the only significant barrier to trade is a ban on the

GMO maize) and does not operate a marketing board or even a Food Reserve Agency. (Adam

Gross et al.)

The food price crisis of 2007–2008 and recent resurgence of food prices have focused

increasing attention on the causes and consequences of food price volatility in international food

markets and the developing world, particularly in Africa south of the Sahara.

There are some factors which are attributed to the great price volatility of maize in the

region:

Policy uncertainty is just one of the risks to which the maize sector in East Africa is

exposed. Risk exposure is a problem. For example, farmers‟ response to risk depends on

their ability to carry risk, which is a function of their overall wealth. The poorest farmers

therefore tend to be the most risk averse, so risk exposure is likely to perpetuate and reinforce

15

rural income inequalities. Risks are exacerbated by weak physical and institutional

infrastructure, which also make it more difficult to manage risks (e.g. poor road infrastructure

hinders maize movements across regions; underdeveloped maize financing systems hinder

seasonal storage). Some risks are difficult to avoid (e.g. weather), but the policy-induced

risks, particularly in Kenya and Tanzania, could be reduced by better decision-making.

Unpredictable import duty levels and marketing board interventions and to a lesser extent,

unpredictable procurement decisions from the World Food Programme, the largest single

maize buyer in the region – prevent the private sector from taking forward positions

(including taking early decisions to import maize in the face of an impending shortfall),

discourage farmers (e.g., Ugandan farmers could produce much more maize if they were

more certain of the market), and make maize storage risky.(Adam gross et al.). One of the

possible ways of dealing with that risk is the introduction of the warehouse receipt finance.

This facilitates storage (giving farmers greater flexibility in deciding when to sell and

stabilizing intra-seasonal prices).African farmers, traders, processors and consumers are

exposed to a wide range of risks. Agricultural production is vulnerable to factors such as

weather (including catastrophic weather events) and disruptions in input supply. Supply

chains are fragile, resulting in large farm-to-fork losses, high transaction costs and frequent

market disruptions, with many supply chain operators suffering from a lack of information,

weak finances and poorly developed infrastructure. National prices are not only affected by

national supply/demand factors, but also by global price developments and a range of macro-

economic, fiscal and regulatory policies and developments (e.g., exchange rate fluctuations,

crop and sales taxes, licensing regimes). This combination of institutional, market and

financial risks that affect grain markets and trade has a particularly negative impact on poor

households that are forced to use a variety of informal mechanisms to cope with income and

consumption risk, including diversification of cropping patterns, off-farm employment, food

storage and sale of assets during hard times. These policies were seen as increasing

uncertainty and reducing incentives for stakeholders to invest in and use alternative market

based risk management mechanisms. (Karugia et al., 2009a)

Evidence shows that maize prices in East and Southern Africa are generally unstable

in countries that pursue interventionist policies and restrict grain trade than those with open

borders. Similarly maize prices are less predictable where boundaries apply restrictions to

16

grain trade as compared to countries with border policies. This indicates a prima facie case

for improving government-private sector co-ordination to improve market functioning and

reduce instability.(Jayne and Tschirley., 2009).

A sudden surge in food prices has increased the number of poor people globally

through the impacts have differed across various countries. A recent study estimates that

between June and December 2010, the average poverty changed by 1.1 % points in low

income countries and 0.7% points in middle income countries and there was a net increase of

44 million people falling below the US $ 1.25 per day extreme poverty lines. The

achievement of the MDGs will remain an unrealistic dream if food insecurity continues

worsening. (Ivanic et al., 2011)

In Kenya, the volatility of maize prices has been a cause for concern as it adversely

affects both the producers and consumers. Producers are also affected by weather, induced

volatility in production. If prices and production vary in opposite directions, then to the

volatility in income is reduced to some extent. The price of maize depends on both real

factors (such as production, which in turn depends on the area harvested and the yield) and

on monetary factors which operate at macro level.

Trade barriers and public grain reserves have increased food price instability.

Government trading interventions have been large and unpredictable. Private traders have

been hesistant to compete against subsidized public enterprises and have been reluctant to

invest in seasonal storage and grain trading. Maize price volatility declined sharply in Kenya

since it adopted the “Maize without Borders Policy” of the EAC in January 2005. (Maize

without Borders in Africa.)

Other causes of price volatility of maize and other major grains in Africa may be but not

limited to these are:-

Marketing constraints do raise prices and volatility, limited storage capacity No major

warehousing or stockpiling services by government or private sector, no smooth supply, high

cost of transport Bulk transport systems are non-existent, high risk of trading, no quality

standards, limited market information, high product loses, disruptions due to conflict, political

instability and high cost of transport is a real problem. ( Mulat Demeke., et al)

The annual per capita maize consumption in Kenya is about 125 kilograms (GoK 1983)

the scarcity of rain has sent the prices for maize grains skyrocketing to levels unaffordable by

17

local peasants. Two kilograms of ungrounded maize jumped from Sh. 70 to Sh. 120 in many

parts of Kenya within the 2010 season. (Omolo 2011). Although most small scale farmers do not

obtain adequate maize production to meet their household needs, they still sell part of their

produce to meet other domestic requirements (MoA 2010).

Developing appropriate maize marketing and trade policies in the context of a growing

structural

deficit in maize and ever shrinking smallholder farm sizes requires a detailed understanding of

the structure and performance of Kenya’s maize value chain. Understanding how the value

chain has developed in turn requires an understanding of the market liberalization process in

Kenya, as this has been the major policy thrust affecting the industry over the past 20 years

(Nyoro. Kiiru. and Jayne., 1999)

Republic of Kenya (2007) analyzed maize prices using descriptive and correlation

methods and found that prices shown wide varieties between the net producing (for instance,

Kitale) and net consuming (for instance, Nyeri) regions as well as between the harvest (Oct.-

Nov.) and post-harvest (Dec.-Aug) seasons. The major storage problems reported by over 85

percent of the farmers surveyed include: uncertain returns from maize and physical and pest

losses of stored maize.

2.1 Theoretical Framework

The study was built on utility and transaction cost theory. This is where the farmer is

maximizing utility to attain the highest profits given certain constraints. Most of the households

are peasant farmers who are semi-commercialized as part of their output is consumed at home

and also they may hire labour or sell out their labour even if the market is fully

functional.(Sadouet and Javnry 1995). The maize farmers as part of the economic agents

maximize net revenue with respect to levels of products and factors subject to constraints that are

market determined fixed factors and technology. Farmer’s revenue is income he gets from the

sale of maize at the given market price. The farmers will be maximizing profits from the sale of

maize subject to the constraints which may be farm management factors, financial factors,

marketing and socio-economic factors.

18

The study was also based on transaction cost theory, which appreciates that the

exchanges in the markets are not costless. (Coarse., 1937). This implies that maize farmers will

incur costs in the course of their production and marketing their maize. These costs are like,

purchasing of inputs, seeds, fertilizers, land ploughing where labour is hired one, harvesting

costs, storage costs, transporting costs, handling costs, loading and offloading costs and

marketing costs such as distribution costs, delivery cost, negotiation and transaction costs. These

transaction cost increase or decrease the price of maize and or reduce or increase farmers income

levels (profits margins). The costs may also arise from imperfect information where farmers need

to have to incur more costs to search for better prices .This is information asymmetry and may

also lead opportunism which consequently results to mistrust amongst the players in the supply

and value addition chains. Mistrust can lead to increased transaction cost to all the players in the

maize production. Farmers may leave a chain that is effective, efficient and convenient because

they do not trust either the information offered by the buyer or the price he is offering for the

maize or the equipment tools or measurement units used. Consequently this leads to increased

transaction costs reducing farmer’s profits margins thus reduced farmer’s income levels. To

overcome some of the information costs farmers have resulted to coming together for a collective

action and join hands to form a marketing society of their maize. These are either informal or

informal like co-operative societies or self-help groups.

2.2 Conceptual Framework

Kenya is an agro based country with most of the natural conditions being favorable

for compositions and Government interventions are therefore the key intervening factors

towards achieving maize prices stability based on the international trade conditions. The

figure below summarizes the Conceptual Framework. Government intervention and farmers’

characteristics are intervening variables whereas a stable price is the dependent variable and

international trade conditions are the independent variable.

19

Figure 1: An illustration of factors contributing to stable maize prices.

Small holder maize farmers have different management characteristics which include

skills and training they got, experience in the sub-sector of maize farming, cropping systems

varieties of maize to plant at the given ecological conditions among others. Different farmers

also use different financial practices in terms of debt utilization and management levels of asset

Consumer

Consumer tastes and preferences.

Consumers expectations.

Consumers purchasing power.

Consumers attitude.

Farmers Characteristics.

Patience.

Use of advanced post-harvest

practices in maize production.

Selection of distribution

channels.

Favourable international trade

conditions.

Maize without borders policy in

Africa.

Stable prices for maize

and maize meal.

20

base, debt asset ratio, and financial records keeping, i.e correct and accurate farm accounts.

Farmers do also face marketing factors commonly from the environment which include issues

like transaction costs in maize marketing in terms of search for buyers and marketing

information, bidding costs and in other cases contractual agreements. Social economics factors

such as age, education levels, gender and also their family size do affect the production and

marketing of maize among the small holder farmers. Other factors such as marketing factors

such as customer search costs, trust lengthy of supply chain and standards and equipment of

measurement interact with each other and together influence the profitability of the farmer. Farm

management factors, financial factors and socio-economic factors will determine the level of

output of the farmer and his/her cost of production. On the other hand, the marketing factors will

influence the marketing of the maize and maize meal which will consequently have an effect on

the farmers’ income levels or rather farmers’ profits.

21

CHAPTER THREE

METHODOLOGY

3.1 Area of Study

Nyeri County is in the former central Kenya province. The county borders the following

Counties ,Kirinyaga to the East,Murang’a to the south,Nyandarua to the west,Laikipia to the

north and Meru to the northwest direction. The total area of Nyeri County 2361.0 Km2.

The

county has the following districts Kieni East, Mukurweine, Nyeri Municipality, Kieni West,

Othaya,and Mathira District. Also the county has six constituencies namely, Othaya , Mathira,

Nyeri Town, Tetu, Mukurweine and Kieni Constituencies. Mathira District is one of the districts

in the county. It has six electoral wards namely, Ruguru, Magutu, Iriani, Konyu, Kirimukuyu and

Karatina Town ward.

Nyeri County experiences rainfall amounts of between 550-1500 mm per annum and its

temperatures ranges from a mean annual minimum of 120Cto a mean maximum of 27

0 C. Nyeri

County has a population of 693558 people(2009 National Census).It has a population density of

208 people/Km2. It has an approximate number of 201703 households and has an age

distribution of 0-14 years (33.8%),15-64 years(59.7%) and 65+years(6.5%). The poverty level in

the county stand at 32.7% and has an age dependency ratios of 100:68.

The main economic activity in the county is agriculture particularly subsistence farming

involving traditional land-use system. This bleeds well with the regions good / favourable

weather /climatic conditions. Tea, coffee, maize and bean farming is the main crop production

practice in the area while milk production and processing is among the livestock production

practice in the area. Natural resources in the area include forest, wildlife, minerals, (stones, sand

,kaolin),livestock, pasture, water and medicinal plants. Road network in the county, bitumen

surface 297.3 Km, gravel surface 323.4 Km, and earth surface 434.7 Km. Mathira constituency is

an electoral constituency in Nyeri County established in 1963.

3.2 Population under Study

The local population in the County and District is predominantly from the Kikuyu

ethnicity. The county has an approximate population of 693558 people. (2009 National Census

Report). The male population is about 49% and that of women is 51% .Approximate Total

number of households is 201703. Approximately 24.5% of the population is an urban population,

22

that is, it lives in the urban centre. Age distribution of 0-14 years (33.8%),15-64 years(59.7%)

and 65+years(6.5%). The poverty level in the county stands at 32.7% and has an age dependency

ratios of 100:68. Mathira District has an approximate area of 296.69 sq. miles and a total

population of 148847 people. (2009 National Census).

The main occupation of the people in Nyeri County and Mathira Division is farming.

Most of the maize producers are small-scale farmers (NALEP 2009). The small-scale farmers

serve both as means and end, that is, they are producers and at the same time they are consumers.

Their production role is the hardest hit by sharp price fluctuations.

3.3 Sample and Sampling Size

The target population consisted of 500 households of Mathira District. The accessible

population came from three (3) wards namely;-Ruguru, Iriani and Karatina Town wards. From

the 10 sub-locations the households were randomly sampled by computer to get the desired

number of the households to be interviewed. Due to financial and time constraints the desired

number of households was limited to 30 households as sampling units.

(1)

where n is the sample size, N is the population, C is the Co-efficient of variation and ℮ is the

acceptance error.

3.4 Instrumentation and Data Collection

To be able to get the desired data I used questionnaires. The questionnaires contained

both the open-ended and close-ended (multiple choice) questions. These questions captured all

the reasons leading to rapid fluctuations of maize prices. Then enumerator assisted in data

collection. Enumerator read the questions to the respondents. The respondents would then give

their answers. To be effective in data collection the enumerator elaborated the questions to the

respondents without leading them to answers. Focus group discussions were also be convened

with respondents so as to save on time and cost and obtain data possessing diverse

characteristics. Each data collection session took 35 minutes and filling of questionnaire

respectively. The questionnaires were filled by the enumerator since some respondents were

23

illiterate and submitted to the researcher or the enumerator. The researcher or enumerator

collected data from respondents either individually or as groups as deemed fit from situations

presented for research.

3.5 Data Analysis

Analysis of data commenced with editing in order to identify and correct errors made by

the respondents, that is, spelling mistakes, wrongly answered or responded items. Data analysis

was carried out using SPSS V 17.0. The researcher widely used descriptive statistical such as

frequency distributions such as variances, percentages, standard deviation, mean, mode and

median to draw inferences concerning relationships and differences found in research results.

Qualitative data was analyzed using qualitative methods. Qualitative data generated was

organized into themes and patterns, categorized through content analysis and then tabulated

and/or represented in pie charts. Conclusions and recommendations would thereafter be made

based on the findings regarding the factors contributing to sudden maize price fluctuations.

24

CHAPTER FOUR

RESULTS AND DISCUSSION

4.1 Introduction

This chapter comprises of presentations and discussions on findings of the study. They

have been discussed under the areas of concern on the objectives of the study. Much of the data

was qualitative and quantitative as well but the analysis was majorly on the quantitative part.

Descriptive statistics such as frequency distributions tables were used to analyze the qualitative

data. The frequency tables were used to summarize and present data in relation to the study

objectives.

4.2 Questionnaire response rate

The questionnaire was administered to smallholder maize farmers in the District who

have been growing maize for a considerable time. The study targeted 500 respondents from the

district. The sample was split into five groups with 6 farmers in each group from the targeted

Wards in the District namely Ruguru, Iriani and Karatina. The response rate was 98.00% from

the maize farmers in the area.

4.3 Relationship between demographic characteristics of the maize farmers and prices of

maize variation

These demographic characteristics of the respondents presented in this section include the

social factors that potentially influence maize production and resultant prices variations such as;

gender, age, size of their families, experience in maize production, tastes and preferences of

market choices, their decisions of storage facilities that they use on their farms, whether the

farmer hires transport or uses his own transport of maize to the markets and education level

among others.

4.3.1 Distribution of farmers by Gender

A personal attribute of the study of the smallholder maize farmers in the study was

gender. During the exercise, data collection farmers were asked to state their gender. The

response rate was 17 males and13 females. This showed that about 56.70% of the responses were

male compared to 43.30% who were females. This shows that there is more male involvement in

maize production in Mathira District than females. This may be brought about by views on maize

25

farming as a commercial activity and thus more men are involved in trying to control resources

in households and as household’s bread winners.

Table 1: Gender of the respondent

Gender Percent

Male 56.7

Female 43.3

Total 100.0

4.3.2 Age distribution of the farmers

Most of the respondents, who are maize producers in Mathira District are aged between

30-40 years with an overall of 36.7%. The Table 2, below shows that 11 persons are aged

between 30 and 40 years of age with 9 of the respondents are below 30 years. 20% of the maize

farmers in the area are between 40-50 years of age with 6 respondents .13.3% of the respondents

constitute of 4 respondents who are 50 years and above. This age difference contributes to

experience in maize farming, assumption of roles, knowledge and experience in choosing the

best and effective market outlets of maize. Age is can be an impediment to innovation since

younger ages are more innovative than the elderly people. Older people are likewise not involved

so much in the agricultural production of maize. Too young people those between 20-30 years of

age too don’t want to involve themselves in agricultural production reason why I had a turnout of

9 respondents.

Table 2 : Age of Respondent

Age bracket Percent

20-30 years 30.0

30-40 years 36.7

40-50 years 20.0

50>years 13.3

Total 100.0

4.4 Size of land portions set for maize production

As shown in Table 3 below, majority of respondent farmers have portioned 1 acre of their

land for maize production. About 36.7% of the farmers have set aside 1 acre of their farm land

26

for maize production. This contributes to different production capacities among the farmers in

the area. Therefore, as a result these farmers output is very low as compared to those farmers

who have employed more than 1 acre for maize production. The reason behind this could be

because most farmers have little land for farming since they are smallholder farmers with

majority of them owning less than 3 acres of land. Land usage affects production more than land

size. The allocation of less land for maize production can also be as a result of farmers’

engagement in other agricultural activities such as dairy farming.

Table 3 : Size of land portions set for maize production

Land in

acres Percent

0.50 3.3

0.70 3.3

1.00 36.7

1.50 6.7

2.00 33.3

2.50 3.3

3.00 13.3

Total 100.0

4.5 Farmer’s market choices for his / her maize

From Table 4, farmers in the area are seen to have varied market choices for their maize.

An average of 33.3% of the farmers which represents 10 farmers prefer to sell their maize to the

individual consumers in the market. These consumers are for example the households

consumers, hotels, cafeterias and maize traders in the markets in the area. All these customers

have their own prices that they buy maize from the farmers. Farmers market chooses to sell his

/her maize to his / her preferred customer because of the returns he gets from that. An average

number of 10 farmers are seen to prefer to sell their maize to individuals customers as opposed to

7 farmers who choose to sell their maize to schools, farmers who prefer to sell their maize to

cereals board and 5 farmers who prefer selling their maize to the millers. 2 farmers have no clear

preference to which they sell their maize to. Individual consumers are always motivated by

utility maximization, thus they tend to offer low prices for the maize of the farmers. This is so

evident as the farmers responded that they incur some losses when they sell their maize to the

27

individual customers. Therefore, as a result the welfare of the farmers whose to sell their maize

to the individual consumers is reduced, due to decreased incomes.

Table 4 : Farmer’s market choices for his / her maize

Market choices Percent

Schools 23.3

Cereals Board 20.0

Millers 16.7

individual consumers 33.3

Not applicable 6.7

Total 100.0

4.6 Storage of maize and storage

Table 5, below shows the storage behaviors of the farmers in the area.56.7% of farmers in

the area doesn’t store their maize when they harvest it. This percentage represents an average

number of 17 farmers in the area. In contrast 43.3% of the farmers in the area do store their

maize after harvest. It is an average of 13 farmers. During harvest time the supply of maize is

very high, therefore due to availability of maize at that time, prices of maize tends to go down,

even below what the farmer might have sold his maize in previous season. Those farmers who do

not store their maize tend to sell their maize at the prevailing market prices of the maize so as to

avoid maize losses that may come inform of maize spoilage like rotting, infestation by pests,

toxic chemicals accumulation like afflatoxins, theft, physical damage like maize breakages etc.

Therefore, farmers suffer from the problem of low maize prices. In contrast those farmers, who

first store their maize and sell at a future date, sell at relatively higher price. This is because of

the altered balance in the supply and demand for maize in the market. The natural law of demand

states that when supply of a commodity is high, the demand is low and the prices are low and

when the supply of the commodity is low, demand is high and prices rises. This is so because

there is a natural or an artificial shortage of the commodity in the market. So in turn, farmers the

13 farmers who store their maize first, sell their maize at a future date at high prices. This in turn

brings about the variations of maize prices in the market. This variation brings about differences

in the income levels of the two groups of farmers in the area; those who first store and those who

don’t store their maize.

28

Table 5: Storage of maize and storage

Response Percent

Yes 43.3

No 56.7

Total 100.0

4.7 Location of market centres

Table 6, is showing the distances in kilometers of the farmers in the area from the market

centres. There are farmers who are located near the market centres and there are others located

far from the market centres. There are farmers who prefer taking their maize to the market direct

instead of selling to the middlemen from their shambas. In my analysis an average number of 14

farmers equaling to 46.7% take their maize to the market, thus they transport the maize by

themselves to the market. This is in contrast to the 36.7 % of the farmers who sell their maize

through the middlemen and 16.7% of farmers who sell their maize through the self -help groups.

Farmers in the study area are evenly spread in the area, for example there is a farmer who is

located 50 kilometres away from the market centre and the farmers is seen to opt taking his

maize to the market. He thus incurs some transportation costs more costs as compared to the

farmer who is located near the market centre, like for example the 5 farmers who are located far

from market in this respective market distances, 6 kilometres,8 kilometers and 10 kilometers.

Unlike the farmer who is located 50 kilometers, these farmers incur less transaction costs. As a

result of these high transportation costs, the respective farmers retaliates to this by increasing the

prices of their maize to cover the high transportation costs.

29

Table 6 : Location of market centers

Distance in Kilometers Percent

6.00 3.3

8.00 3.3

10.00 10.0

15.00 13.3

16.00 3.3

18.00 3.3

19.00 3.3

20.00 16.7

25.00 13.3

27.00 3.3

30.00 13.3

35.00 6.7

40.00 3.3

50.00 3.3

Total 100.0

30

CHAPTER FIVE

CONCLUSION AND RECOMMENDATION

5.1 Conclusion

Maize farmers in Mathira have been complaining of the meager incomes they get from

sale of maize. The study on certain factors in Mathira District and determines whether they have

an influence to the maize prices in the markets. One of the objectives of the study was to

determine whether market choices of the farmers lead to variations of maize prices. And as

responded by some farmers, their choices have either a direct or an indirect influence on the

price variations of maize in the market in the area. Farmers choosing to sell their maize to the

individual consumers are prone price instability of maize in the markets in the area. This is due

to the reason that consumers are optimizing agents and their objective is always to maximize

utility. Thus they always tend to buy farmers maize at a price that they see its fit for them and

that one will help them achieve their objective of utility maximization. The second objective was

to determine whether the storage of maize leads in any way to price variations of maize in the

market in Mathira District. A considerable number of farmers sell their maize immediately they

harvest without storing. From my study 56.7% of the farmers do not store their maize after

harvest. They tend to sell their maize immediately they harvest at whichever prevailing prices in

the markets in the area. The location of market centres has also been seen to influence prices of

maize in the region. Farmers who incur high transportation costs tend to alter prices in the

market to cover the costs involved in transportation.

5.2 Recommendations

To look into the welfare of the maize farmers in Mathira District a number of things need

to be done.

There need to be community cereal banking. This is where smallholder farmers come

together to store their produce together. A cereal bank is a community based institution involving

a village or a group of villages that stocks and manages the operations of acquiring, pricing and

supplying grain. The purpose of a cereal bank is to control supply of food grains like maize in

Mathira District and this improves food security during the periods of scarcity especially during

extended drought periods. This would also to some extent stabilize maize prices in the market

31

centres within Mathira District. Similarly community based cereal banks would aid those farmers

who don’t have modern storage facilities on their farmers.

The county government should also improve the road network system in the County. This

will help counter the problems of high transportation costs of maize farmers in the county. Those

farmers in areas with seasonal road network responded that they always incur high transportation

costs when marketing their maize.

32

REFERENCES

Ariga, J., T.S Jayne., and S. Njukia. (2009). Staple food prices in Kenya. Prepared for the

COMESA policy seminar on “Variation in staple food prices: Causes, consequence, and

policy options”, Maputo, Mozambique, 25-26 January 2010.

Badiane O., Shively GE., (1998). Spatial integration, transport costs and the resource of local

prices to policy changes in Ghana. J Dev Econ 56:411–431

Booker Owuor., Beatrice Wambui., Gem Argwings-Kodhek and Colin Poulton.(2009).The Role

and Performance of Ministry of Agriculture in

Byerlee D., Jayne TS., Myers RJ., (2006). Managing food price risks and instability in a

liberalizing market environment: overview and policy options. Food Policy 31:275–287

Campenhout BV (2007) Modeling trends in food market integration: method and an application

to Tanzania maize markets. Food Policy 32:112–127

Chapoto A., and T.S. Jayne., (2009). Maize price instability in eastern and southern Africa: The

impact of trade barriers and market intervention. Prepared for the COMESA policy

seminar on Variation in staple food prices: Causes, consequence, and policy options,

Maputo, Mozambique, 25-26 January 2010.

Elodie Maitre D’Hôtel.,Tristan Le Cotty., Thom Jayne., (2012).Price Volatility And Farm

Income Stabilization. Modeling Outcomes and Assessing Market and Policy Based

Responses.

FAO, IFAD (International Fund for Agricultural Development), and WFP (World Food

Programme). (2011). The 2011 State of Food Insecurity in the World. Rome: FAO

FAO, IFPRI (International Food Policy Research Institute), IFAD, IMF (International Monetary

Fund), OECD (Organization of Economic Cooperation and Development), UNCTAD

(United Nations Conference on Trade and Development), World Bank, World Food

Programme, WTO (World Trade Organization), and the United Nations High-Level

Task Force. (2011). Price Volatility in Food and Agricultural Markets: Policy

Responses. Policy Report.

Gem Argwings Kodhek, T.S Jayne, Gerald Nyambane, Tom Awour and T. Yamano.,

(1999)How Can Micro Level Household Information Make a Difference for Agricultural

Policy making? Selected Examples from KAMPAP Survey of Smallholder Agriculture

33

and Non-Farm Activities of Selected Districts in Kenya July 1999. Conference

Proceedings by Tegemeo Institute, Egerton University on Kenya Agricultural

Monitoring and Policy Analysis Project.

Government of Kenya. ( GoK., 2009, GoK., 2005, Ibid)

J. Harrigan., Department of Economics.University of Manchester. Agricultural Price Policy.

Government and Market.

James K. Nyoro., Tegemeo Institute, Egerton University, Kenya. Kenya’s Competitiveness in

Domestic Maize Production. Implications for food insecurity.

Jayne T., Myers R & Nyoro J. (2008), The Effects of NCPB Marketing Policies on Maize

Market Prices in Kenya, Agricultural Economics 38.

Kenya Maize Development Programme. (KMDP 2012)

Ministry Of Agriculture – Kenya ( MoA., 2010)

Minot, N. (2009a). Staple food prices in Malawi. Prepared for the COMESA policy seminar on

“Variation in staple food prices: Causes, consequence, and policy options”, Maputo,

Mozambique, 25-26 January 2010.

Mulat Demeke et al., Johannesburg, South Africa, (2012), 16-18 May 2012.Nature and causes

of price volatility in Africa. The case of major grains in Africa.

Nicholas Minot., (2012).International Food Policy Research Institute. Senior Research Fellow,

Markets, Trade and Institutions. Food Price Volatility in Africa. Has it really increased?

Markets, Trade and Institutions Division.

Nyeri North District Development Plan. (2008-2012)

Nyeri South District.

Nyoro J. K., Kiiru M. W. and Jayne T. S. (1999). Evolution of Kenya’s Maize Marketing System

in the Post- Liberation Era. Tegemeo Working Paper No.2A of June 1999.

34

Nyoro J.K., (1992).Competitiveness of Maize Production Systems in Kenya. Proceedings of the

conference on Maize Supply and marketing under Market Liberalization. June 18th

to

19th

1992, Nairobi, Kenya.

Owuor B. and Hoffler H., (2009). High Commodity Prices. Who gets the money?

Republic of Kenya (2007). Kenya Vision 2030. A competitive and prosperous nation Nairobi,

Kenya. Ministries of Planning and National Development in partnership, Kenya and

Government of Finland.

The National Agriculture and Livestock Extension Programme (NALEP 2009)

35

APPENDIX

RESEARCH QUESTIONNAIRE

I am Henrick W Muriithi, a student at Egerton University duly registered in the Department of

Agricultural Economics & Agribusiness Management. I’m conducting an investigation on the effects of

maize’s price instability on income levels and household lives of smallholder maize farmers in Mathira

District, Nyeri County. The information provided here-under will be used with intent for this research and

requires your honest opinion about the questions inquired. Thus, answers you give on this questionnaire

will be treated with utmost discretion.

1. Personal Information.

1. Location………………………………

2. Age.

20-30 years. [ ]

30-40 years. [ ]

40-50 years. [ ]

50 > years. [ ]

3. Family size(in numbers)…………………….

4. Marital Status. Single [ ] Married [ ]

Widow [ ] Divorced [ ]

5. Sex ( Tick where appropriate)

Male [ ] Female [ ]

6. Education level

Primary [ ]

Secondary [ ]

Tertiary [ ]

No Formal Education. [ ]

2. Farm Details. (Land Ownership)

1. Farmer’s farm size in acres. More than 3 acres [ ]

2-3 Acres [ ]

1-2 Acres [ ]

Less than 1 Acre. [ ]

2. Form of ownership of land. Inherited [ ] Permanent.(Bought) [ ]

Rental (Leased) [ ] Communal [ ]

3. What is the size of your land that you have partitioned for maize production? .......

Acres.

4. For what purposes do you practice maize farming?

Subsistence purposes. [ ]

Commercial purposes. [ ]

5. What is your average maize production? (In 90kg bags)? (specify)...................

3. Location Of Market Centres and Marketing Choice.

1. In what form(s) do you sell your maize.

Green Maize [ ] Dry maize [ ] Both Green & Dry [ ]

2. How far is the market centre where you take your maize for sale? (Karatina Market Centre, in

Km.)……..Kms.

3. What is the nature of the roads in the in the area to where you market your maize?

All weather road. (Tarmac.) [ ]

Seasonal road. (Murram.) [ ]

36

4. How do you sell your maize?

To middlemen. [ ]

Taking maize to the market. [ ]

Through self-help groups. [ ]

5. Which is your target consumer market?

Schools. [ ]

Cereals Board. [ ]

Millers [ ]

Individual Consumers. [ ]

Not applicable [ ]

6. If you take your maize to the market which type of transport do you use?

Hired [ ]

Own. [ ]

Not applicable [ ]

7. During transportation, do you experience any losses to your maize? Yes [ ] No[ ]

8. What are those losses?

Theft. [ ]

Maize spillage. [ ]

Spoilage [ ]

No loss [ ]

Others (specify)………………………………………………

9. Do these losses affect the prices of your maize? Yes [ ] No [ ].

10. If yes, how do they affect it?

(Specify)………………………………………………………………………………….

11. Apart from transportation costs and spoilage costs, which among these costs do you also incur

while marketing maize?

Market Gate fees. [ ]

Agency fees. [ ]

Negotiation costs. [ ]

None [ ]

Others(specify)……………………………..

12. What is the approximate transportation cost in Kenya shillings per sack? Kshs……

13. What is the general response in market prices for maize as a result of these costs?

Not applicable [ ]

Prices remain constant [ ]

Prices decrease steadily [ ]

Prices increase steadily [ ]

4. Post-Harvest Activities and Storage Facilities.

1. Do you experience any losses after harvesting? Yes [ ] No [ ]

2. If YES what kinds of losses are those?

Rotting of Maize [ ]

Pests (weevils) infestation [ ]

Theft [ ]

Physical Damage by rodents [ ]

Chemical Damage. (Toxins) [ ]

Others. (Specify)…………………………….

3. What storage facilities do you use?

Traditional stores.(gallas) [ ]

Modern silos. [ ]

37

Both of them. [ ]

None of them. [ ]

Others (specify)………………………………………..

4. In your own view do you think storage of your maize contributes in any way to price

variations of maize in the market? Yes [ ]

No [ ].Give reasons for your

answers…………………………………………………………………………………

5. When do you realize higher profits when you sell your maize?

i. When you sell immediately after you harvest. [ ]

ii. When you first store and sell in future. [ ]

6. What proportion of your household income comes from your maize sales?

Less than half. [ ]

About a half. [ ]

More than a half. [ ]

7. How do the above identified problems affect your income level?

Increases [ ]

Decreases [ ]

Remains constant. [ ]

8. In your own view what is the overall effect of the responses in the changes of income levels to

your household live?

Positive [ ] Negative [ ] Neutral [ ]

Thank you for participating in this research work though your co-operation. God bless you.