The Burden of Produce Cess and other Market Charges in Kenya’s Agriculture

Authors

  • Maurice J Ogada
  • Paul M Guthiga
  • Geophrey O. Sikei
  • Germano Mwabu
  • Chris O. Shimba
  • Eric Momanyi

Abstract

The study was conducted to quantify the impact of produce cess and market charges on the cost structure of major agricultural commodities in Kenya under a newly devolved system of government. The study used a blend of qualitative and quantitative methods. Analysis of quantitative data involved computation of total costs, revenues, cess as a proportion of total cost, the impact of cess on costs and cost structure. To assess the impact of cess on costs, regression analysis was used. Results showed that produce cess significantly increased production and distribution costs. A one percent increase in cess raised the average distribution cost by 0.8% and average production cost by 0.2%. Therefore, county governments should review levying of cess to avoid charging it at multiple points. This is important for enhancing food and nutritional security, and improving incomes of households which are dependent on either production or trade in agricultural produce.

Author Biographies

Maurice J Ogada

Taita Taveta University,P.O. Box 635-80300, Voi-Kenya,Phone Number: +254 720 877 035

Paul M Guthiga

International Livestock Research Institute (ILRI),P.O. Box 30709-00100,Nairobi-Kenya,Tel: +254725587381

Geophrey O. Sikei

WFP, Nairobi

Germano Mwabu

University of Nairobi, School of Economics,P.O. Box 30197-00100, Nairobi

Chris O. Shimba

Kenya Markets Trust, P.O. Box 44817, 00100, Nairobi, KENYA

Eric Momanyi

Kenya Markets Trust, P.O. Box 44817, 00100, Nairobi, KENYA.

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