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May 12, 2009
Source: CIMMYT E-News, vol 6
no. 3, April 2009
http://www.cimmyt.org/english/wps/news/2009/may/maizeKenya.htm
It is a common dilemma for
non-profits and assistance programs: how to deliver benefits to
the needy without creating dependency or disrupting markets.
Addressing this problem, Maize Seed for the Poor (MSP), a pilot
project in Kenya, is exploring ways to offer farmers subsidized
agricultural inputs to boost farm productivity, while also
energizing local seed markets.
Gathered together under the bright sun and clear Kenyan skies
highlands, several hundred farmers in Kavuturi, a village in the
Embu district, wait in line to receive coupons for discounts on
improved maize seed. Maize, the most important food crop in
Kenya, provides more than a third of the calories and proteins
consumed in the country. Yet many smallholder farmers lack the
cash to purchase improved seed, an input that can greatly
enhance crop yields and farm families’ food security, and if
only a few farmers are willing or able to purchase seed and
fertilizer, then the markets necessary for the supply of these
products will never develop.
Maize Seed for the Poor (MSP) hopes to help change this. The
recently-launched project targets farmers in Kenya’s Embu and
Kisii regions and includes partners from CIMMYT, the Seed Trade
Association of Kenya, the Kenya Agricultural Research Institute
(KARI), and the International Food Policy Research Institute,
and receives funding from the USAID and the American Seed Trade
Association. Working together, these organizations have
distributed 16,200 coupons between mid-March and the beginning
of April. The coupons can be used to purchase seed at a discount
from selected agro-dealers, who then cash the coupons at Equity
Bank in Kenya where MSP has opened a Ksh 1.5 million (about USD
19,350) account. All coupons are printed with security features
such as watermarks and UV-readable images to prevent fraud.
A worthwhile mission
“We are trying to determine the most cost-effective way to bring
affordable inputs to the poor farmer,” says Hugo De Groote, a
CIMMYT agricultural economist based in Kenya. To do this, MSP is
using a randomized coupon system that, with later follow-up,
will show which amounts and distribution methods provide the
best benefits. But the trick is to help farmers without harming
the local private seed industry. “We don’t want to diminish
demand by giving seeds away. Seed companies need incentive to
stay in business and provide these areas with agricultural
inputs,” De Groote says.
Economic liberalization in the 1990s led to the abolition of
many state-led agricultural interventions—including input
subsidies—in developing countries. This aid cutback contributed
to stagnating crop yields and reduced food security in many
rural households. Hoping to reverse these unintended
consequences, several governments are now considering a return
to input subsides, but in a carefully targeted form. A recent,
successful example is Malawi, where a government program
distributed coupons to farmers so they could purchase maize seed
and fertilizer at reduced prices. With the added benefit of a
good rainfall, maize production in Malawi doubled in 2006 and
almost tripled in 2007. De Groote hopes that if MSP proves
successful, the localized experiment can be used as a model for
a national Kenyan program, similar to the one in Malawi.
How it works
The MSP project uses two classification methods: one in which
all farmers of the community are invited to participate, and a
direct identification system that is designed to target only
resource-poor farmers. Direct identification is done by a
committee of village elders and other knowledgeable people who
create a list of characteristics that define a family as
resource-poor. Local households that fit the description are
then asked to participate.
All participating farmers are randomly assigned a coupon valued
at 60 or 120 Ksh (1 USD=78 Ksh). Each farm family has the
possibility of receiving two or five of these coupons. As an
experimental control, some will receive no coupons at all (these
farmers will be given either a kilogram of cooking fat or sugar
for their troubles). However, this is not a give-away program.
Participants can use only one coupon per 2 kg bag of seed,
regardless of how many coupons they initially receive. Since a 2
kg bag of improved maize seed from the Kenya Seed Company
typically costs 240 Ksh, a coupon will not cover the full cost.
The farmer must pay the remaining amount to experience the
program’s benefits.
“The idea is that farmers need to contribute to part of the
cost. The use of multiple coupons is so farmers can buy
different varieties, or buy them at different times,” De Groote
says. "Farmers are also not allowed to sell coupons, but can use
them to buy seed for family or friends."
Farmers like the seed
“This maize is stronger than other maize,” says farmer Catherine
Njura, who lives in Kawathi Village, Runyenjes, Embu district
with her husband and three children. She received five coupons
from MSP worth 60 Ksh each; she used one to buy a bag of Duma
seed, priced at 360 Ksh and marketed by Seed Co. “We’d heard it
was early-maturing and that it grew well when there was not much
rainfall,” she says.
Njura helps farm a 0.5 acre homestead which provides her
family’s livelihood. They grow a diverse assortment of fruits
and crops such as sugarcane, beans, and maize. Although Njura
used no fertilizer with her new seed, her three-week-old maize
plantlets appear to be growing well; previously Njura only
planted recycled seed of a local variety.
Analyzing the impact
Njura’s story shows how the program can achieve important aims
like encouraging resource-poor farmers to learn about improved
maize varieties, to use them, and to purchase quality seed from
local providers. This benefits individual businesses like the
agro-dealers and the bank, as well as assisting the region's
economy. Njura also echoes feedback from farmers and other
project participants, with regard to what can be improved.
“(The instructions) were a bit confusing. Some people didn’t
understand that they’d have to pay (anything for the seed),”
Njura says.
The agro-dealers were generally very pleased with the coupon
system, in that it increased their clientele, provided free
publicity, and fostered a productive relationship with the bank
(which offers a range of services from which they can benefit).
But they also suggested simplifying the coupon redemption
process, offering coupons for fertilizer, and ensuring that
farmers receive the coupons well before sowing time.
Targeting smallholders
“Women from our group said that if the coupons had been for one
kilogram bags, they would have gone further,” says Madrime
Nthiga, maize agronomist with KARI-Embu. “Some farmers are very
poor—they work with as little as an eighth of a hectare of land,
so with two kilograms, seed will go to waste.”
Typical sowing rates for monoculture maize are 20-25 kg of seed
per hectare, but farmers in Kenya often sow at far lower
densities, and intersperse the maize with other crops in the
same field, partly as protection against food insecurity. This
strategy of diversification paid off for Njura and her family
the previous year, when a severe drought made it difficult to
get food or to feed livestock, and they drew upon fruit trees on
their small homestead to avoid starvation. "All the crops dried
up," she says. "We survived by eating bananas, mango, and
avocado, which we sometimes boiled together. We couldn't afford
to purchase maize at the market."
The MSP coupons expired on 30 April 2009. Now the project
researchers will analyze the costs of the approach, as well as
which farmers participated and how they have benefited. The best
elements from this experimental project will be incorporated
into subsequent initiatives.
"Ultimately, the best options will be those that are most
reliable in targeting low-income farmers, delivering noticeable
benefits to these farmers, and minimizing both direct
administrative costs and the cost of 'leakage' to higher-income
farmers," says De Groote. "This can only be ascertained from
on-the-ground experience, which is what we're obtaining in this
project."
For more information: Hugo De Groote, Economist (h.degroote@cgiar.org) |
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