The level and determinants of rural saving among small-scale farmers:the case of Mumias sugar-cane outgrowers

Abstract

This study aimed at estimating the saving residual capacities among the Mumias sugar-cane farmers. The study also focused on the possible determinants of the saving residual of these farmers. The possible determinants of saving residual considered in the study are cash income per year, level of wealth assets held, and household size. The other determinants considered are number of children in the household attending school, age of the household head and education level of the household head. A total of fourty five farmers (households) were interviewed. A questionnaire was used for the collection of the data. Saving residual was estimated by deducting the total of all ths possible expenditure outlets from the total cash or disposable income. The relationships and the , causal relationships between the saving residual and the possible determinants of saving residual we~e analysed using the correlation analysis and the regression analysis respectively. The correlation analysis and the regression analysis were carried out by use of the XDS 3 computer package. The results arrived at in the study indicate that saving residual are substantial among the small-scale sugar-cane farmers in Mumias area. The substantial saving residual are as a result of relatively high incomes from sugar-cane growing. Only cash income and household size were found to be significant determinants of the saving residual. The paper ends by giving some recommendations on how the substantial saving residual could be mobilised or utilized so that its effects in economic growth of Mumias area and even of the country as a whole could be felt.