Determination of economic competitiveness and optimal resource allocation in rainfed rice production on smallholder farms: the case of Amukura division, Busia district, Kenya

Research on rainfed rice production and its competitiveness on \nSmallholder farms of Amukura Division of Busia District was carried \nout in February, March and April 1991. The data were collected using \na structured questionnaire which was administered to fifty farmers. \nThe specific objectives of the study were:- \n(i) To describe the farming system in which rainfed rice \nfarming is found and to determine the various farm \nresources available to rainfed rice producers. \n(ii).To determine the relative profitability of rainfed rice \nproduction vis-a-vis other competing enterprises. \n(iii)To find out if rainfed rice could feature in the \noptimal farm plans. \nThe analytical methods used to achieve the above objectives were \nGross Margin Analysis and Linear Programming. \nThe results of the study showed that rainfed rice was excluded from \nthe optimal farm plans for the large and aggregated farm models; rice \nwas included in the optimal plan for the small rice farm model, but \nat a relatively low hectarage of about 0.18. Parametric Linear \nProgramming showed that for rice to be profitably produced and be \nincluded in the optimal farm plans substantial increases in producer \nprices of paddy rice would have to be effected by the Government. Also \nfor the farmers to put at least 1 ha under rice, which is being aimed \nat by the LBDA and Ministry of Agr icul ture, price alone is not \nsufficient. \nThe sensitivity analysis results showed that when price is increased \nto Ksh.8 about 0.88 ha will be planted and also when price is at \nKsh.l0 still -0--.--8-8- ha will be put under rice. Hence other factors of \nproduction as well as favourable prices will have to be looked into \nif rainfed rice productions is to be improved. \nThe results of the analysis,of non-rice farm models showed that \ncotton grown in the second season, maize grown in the second season \nand cassava were the most profitable enterprises in the optimal farm \nplan for the small non-rice farm model. On the large and aggregated \nnon-rice farm models, cassava, maize grown in the first season and \nsorghum gr9wn in both the first and second seasons were the most \nprofitable enterprises. \nThe study concludes that rainfed rice is unprofitable to produce \nat the prevailing economic conditions in the Amukura area. The study \nrecommends that: \n(i) the government should increase the producer price of rice. \n(ii) ways should be found to ease the operating capital \nconstraint by offering short term credit to farmers in the \nstudy area. \n(iii) the extension staff should develop optimal plans for \nthe non-rice farms of this area. This will enable farmers to \noptimize resource use. \n(iv) price increases alone are not sufficient to \nincrease rice output as shown by the results of the \nsensitivity analysis. Therefore, farmers should be \neducated on modern ways of rice production.