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

The rising world prices for major tradable staples such as maize have been a concern for sub-Saharan countries such as Kenya which are maize deficit countries. Maize is a major staple foodfor over 80 percent of Kenya’s population. Kenya relies on maize for up to 40 percent of itsdietary energy supply and is accordingly searching for ways to increase maize productivity.Maize productivity has been rising in the last decade manly as a result of the use of improvedgermplasm and fertilizer. However, the proportion of farmers using these technologies is low andthe aggregate productivity in maize is low compared to other countries and its potential. Previousstudies on input adoption have often assumed the existence of perfect supply and productmarkets, tending to ignore the important but significant role played by institutions as well as therole of transaction costs associated with market exchange. This study makes use of qualitativeinformation from institutions and actors in seed input value chains as well as quantitativeinformation collected from a sample of 150 farmers, in the Moist Transitional Maize Zones ofKenya. A two stage regression model was applied to analyze determinants of adoption andfactors affecting degree of adoption of certified improved maize seed. The results show that asfarmers adopt certified seeds, they incur higher transaction costs than non adopters, ruralinfrastructure, social capital such as membership in groups and trust play an important role in thedecision of whether or not to use certified seed.