Abstract
Wheat is the second most important carbohydrate staple in Kenya and is produced by both smallholder and large-scale farmers. Smallholders are the majority, but produce <20% of the total national production. Compared to large-scale farmers, they have been considered to be less efficient producers and thus fail to benefit fully from their participation in the wheat value chain. This study aims at establishing the value accruing to smallholder and large-scale farmers participating in wheat production in north-west Mt. Kenya. For comparative purposes and to explore the potential of smallholder farmers, a sample of 58 smallholder and seven large-scale farmers was selected for the study. We use budget analysis to determine the gross output, cost of production and gross margins attained by the smallholder and large-scale farmers. Further, an analysis of constraints to productivity is done to establish the factors hindering farmers from reaching high yield potential. Results of the study show that smallholder farmers obtain lower yields, have higher costs of production per bag of wheat and lower gross margins compared to large-scale farmers. High cost of inputs, low market prices, low bargaining power, high cost of machinery services, diseases and weeds were among factors excluding smallholder farmers from benefitting from their participation in the value chain. However, results also show that smallholder farmers can produce wheat profitably albeit with necessary support. Thus, interventions should consider these constraints and aim at improving smallholder farmers' horizontal and vertical integration in the value chain. We recommend continued investment in research and development on wheat, adoption of climate resilient agricultural practices, improvements in the fertilizer subsidy programme and creating or increasing participation in producer groups that will provide possibilities of increased bargaining power and reduction of costs through improved access to machinery services, markets and credit.
Highlights
Wheat is the second most important staple food in Kenya, making it important for food security (Monroy et al, 2013)
The results revealed that 41% of smallholder farmers had a negative gross margin
In as much as the results suggest that large-scale farmers achieve higher yields compared to smallholder farmers, both type of farmers are producing below their yield potential
Summary
Wheat is the second most important staple food in Kenya, making it important for food security (Monroy et al, 2013). Per capita consumption of wheat in the country stands at 43 kilograms per person (KNBS, 2020). Muyanga et al (2005) estimated per capita consumption among high income households at 67 kilograms. Smallholders in Wheat Value Chain household expenditure item constituting the greatest proportion of the staple budget, for urban households (Muyanga et al, 2005; Kamau et al, 2011). Wheat consumption has been growing at an average of 4% per year (FAO, 2015) propelled by rising population, increased incomes and urbanization (Negassa et al, 2013; Kiriti Nganga and Mugo, 2018). Urbanization, which is associated with a change of dietary preferences to wheat-based diets, has been a significant factor driving wheat demand upwards (Macharia and Ngina, 2017)
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