Response of Sorghum Production in Kenya to Prices and Public Investments

Abstract

Expansion of sorghum production in the arid and semi-arid areas in Kenya has been singled out as a potential for addressing food security challenges due to climate shocks affecting maize production and reduced availability of arable land in the medium and high potential areas. Towards achieving this the government has used guaranteed minimum output prices, input subsidies and public investments to promote agricultural developments as some of the instruments of policy to provide incentives to farmers. Literature is deficient of studies on production behaviour of sorghum in the country with respect to market prices and public investments. This study provides an empirical evidence on the response of sorghum production to output and input prices as well as to public investments. The study used data spanning the period 1978 to 2014 to fit an autoregressive distributed lag (ARDL) specification of the output response equation using the EViews statistical software. The findings show that sorghum production in Kenya does not respond to increases in its output price and is not adversely affected by input prices. Increased development spending in agriculture lead to increased sorghum production and also increase use of fertilisers and certified seeds. The findings suggest that policy interventions based on output prices and input prices alone would not yield the desired increased expansion in sorghum production. The government should increase budgetary allocations to agricultural development