The Impact of State Marketing Board Operations on Smallholder Behavior and Incomes: The Case of Kenya

Marketing boards and strategic reserves have re-emerged over the last decade as significant actors in grain markets in eastern and southern Africa, yet there is little empirical research regarding how their activities affect smallholder behavior. This paper uses panel survey data from 1997-2007 on Kenyan smallholders to investigate the effect of Kenya’s National Cereal Produce Board activities on farmgate maize price expectations, output supply, and factor demand. Results show that the NCPB pan-territorial price has a positive effect on smallholders’ maize price expectations, and that smallholders respond to higher expected maize prices by increasing maize production through increased fertilizer use.