ANALYSIS OF DEMAND AND SUPPLY OF MAIZE IN KILIFI DISTRICT, KENYA: A COBWEB MODEL APPROACH

Abstract

Kilifi District is one of the poorest districts in the country. Agriculture is the mainstay of the majority of the people in the district. One of the main causes of poverty in the district  is low level of productivity especially in the agricultural sector. Economic theory postulates that price is an important determinant of supply and demand. In agricultural markets the amount to be produced is chosen before prices are observed. Producers’  expectations about prices are based on observations of previous prices. This is because the supply model for agricultural produce is dynamic. This studytherefore chose to use the cobweb model to analyze supply and demand of maize in Kilifi District. The cobweb model is based on a time lag between supply and demand decisions. Results show that over time there has been a decline in maize production in Kilifi District. The regression results obtained were tested at the 5 per cent level of significance and were found to be unreliable. It can be concluded therefore that farm gate prices has very little influence on the level of productivity of maize in Kilifi District. It is probable that there is another factor that has got a great bearing on the level of annual maize production in Kilifi District. The decline in productivity may be as a result of land fragmentation due to increasing population, expensive and unavailable inputs and insufficient precipitation among others causes.