Factors Influencing the Supply of Wheat :an Analysis for Kenya 1970 - 1989

Abstract

Demand for wheat and wheat products in the country has continued to outstrip the production level over the last two decades. The growth rate in consumption is estimated to be approximately 8% annually wpile the growth rate in production is approximately 5%. This necessitates that a large proportion of our domestic consumption requirements of wheat grain has to be imported. The main objective of this study was to investigate the factors that influence the supply of wheat in Kenya, with the aim of proposing policy measures to improve production. Secondary time series data was used and analyzed using the Ordinary Least Squares (OLS) regression method. The study found that the relative price, the amount of rainfall received in a given period and structural adjustment programmes are significant factors influencing production of wheat. Relative pricesJ ~ectarage planted in the previous period and structural adjustment programmes were found to be significant factors influencing the hectarage planted to wheat. The hectarage planted in a given peri6d, the time trend variable and price indices of fertilizers were found to be insignificant factors influencing the supply of wheat. Policies recommended from the findings of the study include that the relative price be made more favourable for wheat farmers, structural adjustment policies should be redressed in favour of

producers and methods of increasing output per hectare be implemented. Intensive rather than extensive methods of production are also recommended.