Determinants of Market Participation Regimes among Smallholder Maize Producers in Kenya

Abstract

More studies have been conducted on determinants of smallholder participation in markets as sellers, with scant attention to why farmers participate in markets as either net sellers, autarkic or net buyers. Employing a random effect ordered probit model, this paper examines factors determining households’ participation in maize markets as either net sellers, autarkic or net buyers. Contrary to government intentions for producer price supports, this study showed that households that faced high producer selling prices of maize were likely to be net buyers. However, household membership to agricultural production groups increased the likelihood of farmers being net sellers. Similarly, adoption of inorganic fertilizer and improved maize varieties were positively associated with being net sellers. Therefore, policies supporting high producer selling prices should be discouraged and instead encourage those that ease smallholder access to fertilizer and improved maize seed.