3rd Africa Rice Congress Theme 4: Rice policy for food security through smallholder and agribusiness development Mini symposium2: Policy and price transmission mechanisms affecting rice sector development in Africa Author: Maina et al.

1. Supply Response of Rice and Implications for
Food Security Policy: A Case of Mwea
Irrigation Scheme in Kenya
B.J.K Maina, C.W. Kabuti and R. Chepchirchir

2. Why Rice? Why care?
 Rice
is the 3rd most
important staple food in
Kenya after maize and
wheat
 Its rate of consumption
has been growing rapidly
and it is likely to overtake
wheat over time.
 95% is grown under
irrigation in paddy
schemes managed by NIB
 Kenya has a potential to
produce 400,000 ha (rain
fed) &11,000 ha
(irrigated).
 Btwn
2007-2010, Kenya’s rice
production ranged between
45,000 and 50,000 MT, against a
consumption of over 210,000
MT (now 70k vs 300k)
 BUT consumption averages
btwn 180,000 - 250,000 MT
 Balance is imported- mainly
Pakistan- at a preferential rate
of 35%.
 Urban dd increasing by 12%
annually
 Urbanization is increasing by
4.2% - population growth is 3%

3. The policy side, what we think





Staple foods: Maize is
considered as the strategic grain
for Kenya, wheat and wheat
products also important
But Kenya has been exposed to
food insecurity severally- weather
risks(drought)
What we need: To diversify to
more strategic grains to cushion
the nation against such risks
Best option: Rice has been
considered as a close substitute
for maize but also as a high value
crop which if produced in surplus
could be exported
Policy Action Concentration on
price policies to accelerate rice
production
The problem
 Rice production in Kenya has
been on a steady decline –
Kenya still food insecure & at
risk
 Population & urbanization are
increasing – more food
demand – more risks
 Price policies alone cannot
(have not) encouraged supply
Proposal
 Need to explore other nonprice incentives for rice
farmers to increase their
production and subsequent
supply

4. Study area, Materials and Methods
Study
objective: to establish the determinants
that influence rice supply and their significance
Study area: Mwea Irrigation Scheme; the biggest
rice producer in Kenya
Data & Sources: Time series production and
supply data from 1988 to 2007- from MIS,
surrounding outgrowers, MRM &MRGMM
Independent variables: rice prices, water
availability, rainfall, civil unrest, presence of NIB and
real GDP
The model specification: Regression analysis
methods - Nerlovian model (1958) on supply
response

5. Models specifications
 Nerlovian
1977)
model for an annual crop (Askari and Cummings,
……………..…(a)
…………………………(b)
………………………...(c

Zt = other observed, exogenous factors affecting supply at time t are given by the expression
 Model
was a combination of expectation and adjustment lag
variables.
 Modified
the equation by adopting rice supplies as the
dependent variable instead of acreage

6. Data analysis, results &
interpretations
Regression
analysis -OLS method
Normality (Shapiro-Wilk and graphical
tests) and stationarity tests (ADF) were
carried out to ensure accuracy of the
data
values of the coefficients in a log-log
model were directly interpreted as a
measure the respective elasticities.
 Elasticities of the individual variables in
the model indicated the respective
responses to rice supply

7. Summary Statistics
Variable
Rice Supply (MT)
Input costs (Kshs)
Acreage
Import price (Kshs)
Mean- Total Mean- NIB Mean-No NIB
9,276
12,560
1,614
12,616
14,056
9,256
11,301
14,515
3,803
17
15
22
Water supply (M3/ha)
Price local rice (Kshs)
Real GDP (Kshs)
Rainfall (mm/yr)
5
20
691,805
988
6
18
652,412
977
2
26
783,723
1,014
Elasticities
0.3503
0.8213
0.6463
-0.2762
1.7880
-0.9646
0.4695
Regression Results
•GDP, domestic price, import price, acreage, rainfall &
presence of NIB were statistically significant
•Water, input costs and civil unrest were not significant
•Significant variables explain 97.9% of the variability in rice
supply (R2 = 0.9796)

8. Conclusions
local
rice supplies are affected by own prices &
import prices- imported rice is relatively cheaper
that locally produced rice
As the GDP improves importers get more of the
relatively cheaper rice grains and the local farmers
supply less since the prices are forced to match
those of imports
The presence of NIB is significant in provision of
necessary infrastructures and water for irrigation
Though water and input costs were not found to
have any significance in influencing rice supplies,
they are economically important in determining the
amounts of rice that goes to the market

9. What Policy makers should do
Development
of policy guidelines for packaging,
marketing and linkage to suppliers so as to trigger
demand for locally produced rice
Need to monitor rice imports to protect the
local farmers to safeguard their livelihoods –
Argument for rice to be included in the list of
sensitive products
Consider subsidizing farm inputs which would
ensure local rice production increases in addition
to becoming more globally competitive
Ensure that the scheme be continually managed
by the NIB but prices be determined by the
market forces of demand and supply

10. THANK YOU
ACKNOWLEDGEMENTS
AfricaRice
Co-authors
University
Agricom
of Nairobi
Consultants, Ltd. Nairobi