Determinants for Use of Certified Maize Seed and the Relative Importance of Transaction Costs

Abstract

The rising world prices for major tradable staple s such as maize have been a concern for sub- Saharan countries such as Kenya which are maize deficit countries. Maize is a major staple food for over 80 percent of Kenya’s population. Kenya relies on mai ze for up to 40 percent of its dietary energy supply and is accordingly search ing for ways to increase maize productivity. Maize productivity has been rising in the last d ecade manly as a result of the use of improved germplasm and fertilizer. However, the proportion of farmers using these technologies is low and the aggregate productivity in maize is low compared to other countries and its potential. Previous studies on input adoption have often assumed the existence of perfect supply and product markets, tending to ignore the important but significant role played by institutions as well as the role of transaction costs associ ated with market exchange. Th is study makes use of qualitative information from institutions and actors in seed input value chains as well as quantitative information collected from a sample of 150 farmers, in the Moist Transitional Maize Zones of Kenya. A two stage regression model was applie d to analyze determinants of adoption and factors affecting degree of adoption of certified improved maize seed. The results show that as farmers adopt certified seeds, they incur high er transaction costs th an non adopters, rural infrastructure, social capital such as membership in groups and trust play an important role in the decision of whether or no t to use certified seed