Determination of Agricultural Production Constraints and Optimal Enterprise. Mix in an Irrigation Scheme: The Case of HOLA Irrigation Scheme in Kenya

Abstract

This study arose out of the need to address the problem of poor performance of Kenya's large scale irrigation schemes. The poor performance has been evidenced by the negative cash flows that these schemes have consistently recorded since their inception (with the exception of the Mwea Tabere Rice Irrigation Scheme in Kirinyaga district) and the low incomes received by the tenant farmers. The study focused on the Hola Irrigation Scheme which was chosen because of its locat icon in the Tana River Basin which possesses the greatest. potential for irrigation development in the country. The scheme's farm plans were investigated under the null hypothesis that poor enterprise combinations and resource misallocation were the primary sources of its poor performance. Both primary and secondary data were gathered on inputs, outputs, prices and family characteristics, among others. The gross margins of the various crop enterprises were then computed as a basis for determining the relative profitabi1ity. The computed gross margins were also used to formulate an objective function which was an integral component of linear programming, the analytical technique that was employed. A linear programming problem matrix was then constructed and fed into a computer to determine the optimal farm plans. These were / compared with the existing farm plans and were found to - i< 1 - differ significantly. It was therefore inferred that - x it - the existing enterprise combinations and resource allocation patterns were inefficient and that farm incomes could therefore be increased through resource real location. From the dual values, the constraints to increased farm incomes were deduced to be April labour, November labour, capital and subsistence requirements. A marketing constraint was also identified as the cause of the wide fluctuations in commodity prices, especially for onions and tomatoes and lack of adequate storage. The conclusions of the study were that resource use patterns be altered by adapting the optimal farm plans and that the existing structural and institutional constraints be eased to make the change possible. Such constraints include transport infrastructure, credit and storage.