IMPACT OF STRUCTURAL ADJUSTMENT PROGRAMS ON AGRICULTURAL SECTOR GROWTH IN KENYA
Keywords:
SAP, determinants. agricultural growthAbstract
Purpose: The study was an examination of the impact of structural adjustment programs on agricultural growth in Kenya.
Methodology: The study examined the short run and long run determinants of agricultural sector performance in Kenya. To achieve this, the study use time series regression modeling for data spanning from 1975 to 2010. Tests of normality, unit roots test and cointegration test was applied to determine the properties of the data. Upon proof of cointegration, an error correction model was estimated to link the short run and the long run relationships.
Results: Results indicate that structural adjustment programme (SAPs) had a negative and significant long run effect on per capita agriculture GDP. The study concluded that Post Election Violence has a negative and significant long run effect on the per capital agriculture GDP. The study also concluded that the lagged per capital agricultural performance has a positive and significant effect on the per capita agricultural performance. The results also led to the conclusion that the long run per capita agricultural growth may be linked to the short run growth by an error correction term of -0.242583 which indicates that 0.242% of the disequilibria in short run per capita agricultural sector GDP achieved in one period are corrected in the subsequent period. The results also conclude that weather indicators (temperature and precipitation), and per capita infrastructure did not have a significant effect on the short run and long run per capita Agricultural GDP Correlation and regression results indicate that human resource management practices have a positive and significant relationship with firm performance. This was supported by correlation coefficient of 0.346; (p value 0.039) and a regression coefficient of 0.32 ;( p value 0.039) The results led to the acceptance of hypothesis that human resource management practices have a positive effect on firm performance.
Unique contribution to theory, practice and policy: The study recommends that some harmful policies need to be eliminated such as the removal of subsidies. Other policy recommendation are to enhance the adaptation of privatized agricultural institutions; encouragement of value addition in primary agricultural products; non price mechanisms such as Infrastructure should be encouraged especially in the rural areas; and enhancement of the political stability of the country especially during electioneering years.
Downloads
References
Bazaara, N. (2001). Impact of Liberalisation On Agriculture and Food Security In Uganda. Structural Adjustment ParticipatoryReview Initiative (Sapri) Uganda. Centre for Basic ResearchForThe National Steering Committee
Bryceson D., Sarkar P., Fennell S., Ajit SinghA., (2010). Globalisation, Structural Adjustment AndAfrican Agriculture: Analysis And Evidence. Centre for Business Research, University of CambridgeWorking Paper No. 414
Davidson, J. E. H., Hendry, D. F., Srba, F. & Yeo, S. (1978) Econometric Modelling of the Aggregate Time-Series Relationship Between Consumers' Expenditure and Income in the United Kingdom. The Economic Journal, 88, 661-692.
Engle, R. F. & Granger, C. W. J. (1987) Co-Integration and Error Correction: Representation, Estimation, and Testing. Econometrica, 55, 251-276.
Evenson, R. E. & Pray, C. E. (1991) Research and Productivity in Asian Agriculture, Ithaca, Cornell University Press.
Evenson, R. E. (1993) Research and Extension Impacts on Food Crop Production in Indonesia. Upland Agriculture in Asia: Proceeding of a Workshop Bogor, Indonesia.
Evenson, R. E. (2001) Economic Impacts of Agricultural Research and Extension. In Gardner, B. L. andRausser, G. C. (Eds.) Handbook of Agricultural Economics, edition 1, volume 1, chapter 11, pages 573-628. Elsevier
Hag Elamin ,N.A., El Mak E.M (1997).Adjustment programmes and agricultural incentives in Sudan: A comparative study. AERC Research Paper 63.African Economic Research Consortium, Nairobi.
Hazell,P.B.R., Perez, N., Siam, G., and Soliman I., (1995). Impact Of The Structural AdjustmentProgram on Agricultural Production andResource Use In Egypt. Eptd Discussion Paper No. 10. Environment and Production Technology Division. International Food Policy Research Institute1200 Seventeenth Street, N.W.Washington, D.C. 20036-3006 U.S.A.
Inder, B. (1993) Estimating Long-Run Relationships in Economics: A Comparison of Different Approaches. Journal of Econometrics, 57, 53-68.
Johansen, S. (1988) Statistical Analysis of Cointegration Vectors. Journal of Economic Dynamics and Control, 12, 231-254.
Kwanashie,M., Ajilima,I., Garba A.(1998).The Nigerian economy:Response of agriculture toadjustment policies.AERC Research Paper 78. African Economic Research Consortium, Nairobi.
Kydd J., And Thoyer S. (1992). Structural Adjustment And Moroccan Agriculture: An Assessment Of The Reforms In The Sugar And Cereal Sectors. Working Paper No. 70. Oecd Development Centre
Makki, S. S., Thraen, C. S., and Tweeten, L. G., (1999) Returns to American Agricultural Research: Results from a Cointegration Model. Journal of Policy Modeling, 21, 185-211.
Merteens B.(2000). Agricultural performance in Tanzania under structural adjustmentprograms: Is it really so positive?. Agriculture and Human Values 17: 333–346, 2000.Kluwer Academic Publishers. Printed in the Netherlands.
Nyangito H. and Karugia J.T (2000). The impact of recent policy changes on the agricultural sector and public agricultural research in kenya.Institute Of Policy Analysis and Research
Nyangito H. And Okello J.(1998). Kenya’s Agricultural Policy and Sector Performance: 1964 To1996.Occasional Paper No. OP/04/98. Institute Of Policy Analysis And Research
Nyangito H. Nzuma J., Ommeh H., Mbithi M., (2004).Impact of Agricultural Trade and Related Policy Reforms on Food Security in Kenya.KIPPRA Discussion Paper No. 39 June 2004
Pray, C. E. , Fuglie, K., (2001) Private Investment in Agricultural Research and International Technology Transfer in Asia. Agricultural Economic Report No. (AER 805).
Qualman D and Wiebe N. (2002). The Structural Adjustment ofCanadian Agriculture.Canadian Centre for Policy Alternatives410-75 Albert Street, Ottawa, ON K1P 5E7.
Van Rooyen J.,Kirsten J.F., Van Zyl J., Vink N., Simbi T. (1996). Structural Adjustment and Agricultural Policy Reform in South Africa. Technical Paper No. 34. A Joint Publication of AFR/SD and REDSO/ESA
Washington, D.C., Economic Research Service of the U.S. Department of Agriculture (ERS/USDA). Available at http://www.ers.usda.gov/Publications/AER805/.
World Bank Report (2010).Kenya Agricultural Policy Review: Current Trends and Future Options for Pro-poor Agricultural Growth. Agriculture and Rural Development Unit. Sustainable Development Department. Africa Region
Yamaguchi M, Sanker S. (1998). Empirical Analysis of Sri Lankas Agriculture in relation to Policy Reforms with General Equilibrium Growth Accounting Approach (1970 to 1996). Grants in Aid for 21st Century COE Program. Graduate School of Economics. Kobe University.
Tackie N.O., and Abhulimen O.S. (2001).Impact of the Structural Adjustment Program on the Agricultural Sector and Economy of Nigeria. http://www.afea-jad.com/2002/Tackie_Abhulimen.pdf
Kimani J.G ( 2011). The Impact ofresearch and development investment on agricultural sector perfomance in Kenya. Unpublished MA thesis. University of Nairobi
Kimuyu P.(2005). Productivity performance in developing countries. Country case studies.kenya. http://www.unido.org/ fileadmin / user_media / Publications / Pub _ free / Productivity _ performance _ in_DCs_Kenya.pdf
Bigsten A and P Kimuyu (2002) The Structure and Performance of Manufacturing in Kenya. Basingstoke and New York, Palgrave.
Downloads
Published
How to Cite
Issue
Section
License
Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution (CC-BY) 4.0 License that allows others to share the work with an acknowledgment of the work’s authorship and initial publication in this journal.
