Potato pricing and marketing policies: A case study of Kuresoi sub-county in Nakuru county

Abstract

The overall economic and social development in Kenya depends on Agricultural growth and development. Kenya is a major producer of agricultural commodities such as tea and coffee for export while cultivation of food crops such as maize and Irish potatoes are mainly for consumption purposes. This study investigates potato pricing and marketing policies in Kuresoi Sub-County of Nakuru County for the period 1977-2010. Price stability for any crop in the market encourages more production and hence income stability for the farmers. The fluctuations and unpredictable increase in farm input prices, inadequate market competition due to poor infrastructural facilities leads to lower productivity for Irish potatoes and consequent unstable incomes for the farmers. The Ordinary Least Square (OLS) was used as an estimation technique upon verifying of the various assumptions which include linearity, normality and constant variance across observations, no serial correlation and stationarity. The study utilized both descriptive statistics and estimation technique in presentation of the findings. The study variables include the current number of hectares under cultivation, the input cost per hectare, the previous year’s average price of potatoes, the previous year’s last quarter average price of potatoes, the previous year’s yield per hectare and the previous year’s price of competing crop (maize).The regression results show that previous year’s average price of potatoes and the previous year’s last quarter average price of potatoes were statistically significant at 5%. However, the previous year’s average price of potatoes was negatively related to the current number of hectares under cultivation while the previous year’s last quarter average price of potatoes was positively related to the current number of hectares under cultivation. Based on the study findings, it is suggested that stability in prices may be achieved if the government through the relevant sectors improve infrastructures which link farmers to the markets thus increasing income for potato farmers as the cost of production will reduce. Utilization of proper storage facilities such as the cold stores to store Irish potatoes will lead to improved prices in the market. Finally, it is recommended that pricing policies be reviewed in order to ensure sustainability of price stability.