Credit Access and It’s Effect on Rice Production in Mwea Irrigation Scheme in Kirinyaga County, Kenya
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Date
2024-11
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Publisher
Kenyatta University
Abstract
Rice is Kenya’s third most important cereal crop after wheat and maize. It’s grown for commercial purpose and subsistence. Its production contributes to food security, improves the livelihoods of farmers through opportunities and employment for private investment. Rice consumption is higher than its production in Kenya where the gap has been increasing since the year 2000.The annual national consumption was estimated at 300,000 metric tonnes against an annual production of 80,000 metric tonnes in the between the year 2014 to 2020. The deficit has over time been met through imports leading to loss of foreign exchange. Literature reveals that low production of rice has been attributed to unfavorable land tenure system, labour scarcity due to urban migration, poor access to credit and liberalization of irrigation schemes resulting in poor rice management practices. Research findings indicate that credit in agriculture helps by facilitating purchase, uptake of modern technology and use intensity of fixed resources. To address the low production of rice in Kenya several policies have been put in place to specifically address credit access in order to improve production yet the production gap persists. In Kenya credit access still remains a challenge to most rice farmers with the number of farmers seeking credit increasing whereas the percentage of unsuccessful applicants has been increasing. The research focused on three main objectives. Firstly, it aimed to identify the factors influencing access to credit for rice farmers in Mwea, Kirinyaga County. Secondly, it sought to understand the factors that impact the choice of credit sources among rice farmers in the same region. Lastly, the study aimed to assess the effects of credit access on rice production within the Mwea Irrigation Scheme in Kirinyaga County, a region contributing over 60 percent of Kenya's total rice production. The primary data for the research, collected during the 2021/2022 cropping season, utilized a structured questionnaire distributed to a sample of 226 rice farmers, selected through the disproportional sampling method. The data was then analyzed using STATA. Quantitative data analysis employed descriptive and inferential statistics, with logistic regression used for credit access factors, multinomial logistic regression for credit sources, and ordinary least squares for credit's impact on rice production. The findings highlighted that access to credit significantly improves rice production by enabling the purchase of quality seeds, fertilizers, and machinery. They underscore the need for targeted interventions to reduce barriers to credit access and address systemic issues affecting rice farmers.
Description
A Research Project Submitted to the Department of Economic Theory in the School of Business, Economics And Tourism in Partial Fulfillment of the Requirements for the Award of the Degree of Master of Economics (Policy And Management) of Kenyatta University, November 2024.
Supervisor
Jennifer Njaramba