Economic Analysis of Smallholder Organic Vegetable Production System in Kiambu and Kajiado Counties of Kenya

In Kenya, there are more than 200,000 farmers who have been trained on organic farming technologies and systems. Currently certified land under organic management in Kenya stands at 104,211 ha while the organic sub sector employs 12,647 farmers who are directly involved in production of different organic products. Although there are many documented reasons that make farmers to adopt organic farming system, economic benefits present one of the major motivations. These benefits however are not well documented in Africa. The study was conducted to evaluate the determinants of adoption and profitability of smallholder organic vegetable production system in Kajiado and Kiambu counties of Kenya. It also aimed at evaluating the impact of organic production system on profitability of smallholder vegetable production systems in the two counties so as to appraise its contribution to improvement of rural livelihoods. The study collected data on costs, returns, social economic characteristics, farmer characteristics and market characteristics for a sample of 215 smallholder vegetable farmers who were composed of 71 organic and 144 conventional farmers. The whole population of smallholder organic farmers growing vegetables was sampled while conventional farmers sample was made up of clusters established using Stratified sampling method. A logit regression model was used to evaluate the factors affecting adoption of organic production system among smallholder vegetable farmers. Factors associated with profitability of smallholder organic production system were evaluated using an OLS regression model while the impact of organic production system was evaluated using propensity score matching. Organic vegetable production system was found to have a positive significant impact of increasing farm gross margin by 45.16% among smallholder producers in Kiambu and Kajiado Counties of Kenya. The organic vegetable prices were found to be higher than conventional vegetable prices for all the vegetables. Additionally, organic production system was found to have higher production cost but higher gross margin as compared to conventional production system. Age, farming experience, irrigation, land ownership and County of residence were found to be associated with adoption of organic vegetable production system. Furthermore age, farming experience, number of trainings attended availability of irrigation, target market selected, production per acre, cost of production and price per unit had a bearing on the profitability of an organic smallholder vegetable farm. The study recommended wide adoption of organic production system as a tool to improve farm incomes of smallholder vegetable farmers in Kiambu and Kajiado counties of Kenya. Furthermore, the study recommended that organizations involved in promotion of organic farming in the two counties should design strategies that take cognizance of the important role of social economic, farm and market factors in determining profitability and adoption of smallholder organic vegetable production systems. The study concluded by recommending that further similar studies should incorporate the health and environmental benefits and the effect of conversion period while evaluating the economic benefits of organic production system.