The Impact of Market Access on Input Use and Agricultural Productivity: Evidence From Machakos District, Kenya

Abstract

With increasing land scarcity, efforts to increase agricultural production in the past decades have been concentrated on agricultural intensification. Recent studies have shown that improvement in market access increases agricultural productivity, firstly by facilitating specialization and exchange transactions in rural areas, and secondly through intensification of input use. The extent to which specialization and intensification contribute to agricultural productivity, and how this increase is distributed across farmers of different farm sizes and resources will be presented in this paper. The output generated from a variance analysis is used to develop and estimate a three stage least square regression model. The model is used to assess the effects of market access on agricultural productivity, and the distribution of market-generated benefits among small and large farmers. Data collected from 100 farmers in Machakos District is used for the analysis. The results indicate that aggregate physical productivity increases with improvement in market access, but that there is a disparity in the distribution of market-generated efficiency gains between small and large farmers (large farmers benefit more than small farmers), and between farmers with different access options to markets – easy access farmers benefit for than farmers with difficult access.

Journal of Agriculture and Food Sciences Vol. 2 (2) 2004 pp. 77-90