Farm Input Market System in Western Kenya: Constraints, Opportunities, and Policy Implications

Abstract

Widespread and increasing rural poverty in sub-Saharan Africa (SSA) has been of great concern to development community. Compared to other developing regions of the world, low use of inputs by small farmers is one of the factors responsible for the gap between potential and actual yields. Market constraints reduce profitability in use of inputs, increasing production risks. This study interviewed 130 agro-input dealers in Kenya to analyze trends, inputs stocked, distance to markets, services to farmers, and constraints and suggests how to improve input delivery to farmers. Results indicate that although the number of agro-dealers is still small relative to farmer population, there has been a steady annual increase (2–22%, with mean of 16% across inputs) in their number from 2003 to 2005. DAP fertilizer (stocked by 92% of respondents) was most commonly stocked. Others are CAN fertilizer (84%), urea (78%), and NPK (40%). Other services provided by agro-dealers are input information (75% of respondents), credit (13%), bulk breaking (8%), and spraying (4%). Selling price of inputs increased with distance to markets. High transport cost (53%), low demand (30%), lack of market information (21%), lack of storage facilities (13%), and limited business knowledge (12%) were the most important constraints faced by agro-dealers. Policies and institutional frameworks suggested by dealers to streamline agro-input trade were associated, and government was the main institution proposed. The study concludes with suggestions on how to enhance efficiency of agro-dealers in input delivery – timely since SSA governments are presently creating structures to enhance input use.