Sugarcane and soybean are emerging value chains in Awendo Sub-County of Kenya with the potential for alleviating the perpetual problems of food and nutrition insecurity, poverty and unemployment among the rural households. Agricultural extension officers have educated farmers on the economic benefits of sugarcane-soybean integration but the uptake and performance of this cropping system has not been evaluated. This study therefore aimed at contributing to increase in farmer’s household income by improving the level of technical efficiency of sugarcane and soybean production among smallholder farmers in Kenya .The study was based on utility maximization theory and the production theory of the firm. A semi-structured questionnaire was used to collect cross-sectional data from smallholder sugarcane and soybean farmers administered by trained enumerators. A sample of 246 sugarcane and soybean farmers was obtained using multi-stage sampling method. The sample comprised of 154 sugarcane monoculture farmers and 92 sugarcane-soybean intercrop farmers. A logit model was used to assess the socio-economic characteristics influencing the choice of cropping systems among smallholder sugarcane farmers while a Cobb Douglas stochastic production frontier model was used to estimate technical efficiency of sugarcane and soybean production among smallholder farmers in Awendo Sub-County. A two- limit Tobit model was used to identify factors influencing technical efficiency and Stochastic Frontier Analysis was used to estimate the efficiency levels. Sugarcane farming experience, age of the farmer, acreage, marital status (divorce and widowed) and land ownership were the factors influencing the choice of sugarcane cropping system. Results have shown that sugarcane-soybean integrators were more efficient than sugarcane monoculture farmers and the variable land under sugarcane production was the single most important variable in influencing farmers’ efficiency. The mean technical efficiency of 62% and 64 % showed that the potential exist to increase output by 38% and 36% for non-integrators and integrators respectively with the present technology. This study recommends that sugarcane farmers be encouraged to allocate part of their land to production of soybean to enhance food security and improve household income. It further recommends that there is need for training sugarcane and soybean farmers on farm inputs optimum utilization by the extension agents in Awendo Sub-County, Kenya.

Background Information 
Agriculture is the backbone of Kenya’s economy. The contribution of the sector to the country’s Gross Domestic Product (GDP) has been declining over the years from 40 percent in 1963, 33 percent in 1980s to 27 percent in 2014 (KNBS, 2015). The sector however remains dominant sector in the overall economy. The sector accounts for about 60 percent of the foreign exchange in Kenya and about 16 percent of the formal sector employment (KNBS, 2015) and also provides for self-employment. The Kenya’s development policy for the medium term (2000 - 2030) continues to recognize agriculture as an important sector for the economy, with priority centred on food security initiatives and provision of employment opportunities (Okuro et al., 2000). For the agricultural sector to play this central role in the economy rapid growth in output and productivity are critical and the role of sugarcane and soybean in the subsector is important as well. 

In Kenya, sugarcane is mostly grown in rural areas of western parts of the country, which also predominantly comprises of low income earners (KNBS, 2007). Historically, sugarcane has been one of the most important crops in the Kenyan economy alongside tea, coffee, horticulture and maize. According to KSB (2010), the sugar sub-sector contributes about 15% of the agricultural GDP. By far, the largest contribution of the sugarcane industry is its silent contribution to the rural economies in the sugar belts. Farm households and rural businesses depend on the injection of cash derived from the sugar sub-sector. The survival of small towns and market places is also dependent on the incomes from the same. Besides the socio- economic contributions, the industry also provides raw materials for other industries such as bagasse for power co-generation and molasses for a wide range of industrial products including ethanol (KSB, 2010). 

Over the years, the total land brought under cane production has been increasing in the sugar belts. Commercial sugarcane farming has transformed more arable land, particularly in the former Western and Nyanza provinces into expansive monoculture landscapes than any other single plantation crop (GoK, 2006). The total area under cane production in Kenya as at March 2013 was 206,809 hectares and the estimated area and yields by 2014 was 224,925 hectares and 100 tonnes cane per hectare (tch), respectively (KSB, 2010).The increase in area under cane is due to high cane demand because of new mills and expanded capacity of most sugar factories. The sugarcane growing is comprised of both the smallholder farmers as well as the nucleus estates commissioned by the sugar factories. The smallholder farmers supply 92% of the sugar milled in the country and the rest is provided by the nucleus estates (KSB, 2010). The smallholder farmers comprise about 85% of the cane growers in the country (GoK, 2007). 

Sugar production in Kenya has grown from 548,206 MT of sugar in 2009 to 639,741 MT in 2016. During the same period, the quantity of sugar consumed increased from 762,023 MT in 2009 to 972,599 MT in 2016 (KSB, 2017). The deficit in meeting domestic sugar consumption needs from imports has grown from 169, 761 MT in 2009 to 334,109 MT in 2016 (KSB, 2017).On the other hand, the country’s average yields have continued to decline to a low of 58.9 tch in 2011 from the historical high of 137 tch in 1973 as compared to scientific potential of 100 tch (KESREF, 2011), this is in spite of improved sugarcane production technologies such as introduction of new cane varieties developed by KESREF. This average yield is very low compared to other COMESA countries like Egypt 126.4 tch, Zimbabwe 93 tch, Tanzania 85 tch and Malawi 113 tch (MAFAP, 2013). 

Despite the immense potential of sugarcane production in Kenya, the farmers have always reported low yields. The poor performance puts at risk the livelihoods of over 250,000 small scale farmers who depend on the sector. Currently, Kenya is witnessing a massive challenge in meeting the ever growing demand for sugarcane products by achieving self-sufficiency in sugarcane production. This could be due to increase in small scale growers who have autonomy in their operations. This leads to adoption of diverse farm practices which contribute to low sugar cane yields. The un-sustained supply of sugarcane to the processing industries has led to a steep increase in the sugar price in the country. The cost of sugar production in Kenya is currently estimated at USD 870 per MT which is twice the cost of production in other COMESA competing countries. This is very high compared to Zimbabwe (USD 300), Malawi (USD 350), Swaziland (USD340), Sudan (USD 340), and Zambia (USD 400), (Kenya National Assembly, 2015). 

In Awendo Sub-County, Kenya, approximately 60 percent of arable land is under cash crop, 30 percent under food crop and 10 percent is left fallow (CIDP, 2013). Sugarcane occupies 2,400 ha within the nucleus of SONY factory with over 18,000 ha under the out growers 
(CIDP, 2013). Sugarcane is mainly grown under contract between farmers and South Nyanza (SONY) Sugar Company. SONY Sugar Company was incorporated by the Kenyan Government in 1976 and commissioned in 1979 with the objective of generating economic, social and financial gains for the local community and the country through the manufacture of mill white sugar for local consumption. (SONY Sugar Company, 2009). The SONY Sugar Company contributes 15% of the sugar produced in Kenya and is only second to Mumias Sugar Company that contributes 53% (GOK, 2007). The performance of the company therefore has a significant impact on the sugar industry in Kenya. Over the years, the company has experienced production shortfalls, with sugarcane delivery to the factory by contracted farmers declining from 603,646 tonnes of sugarcane (tc) in 1998/99 to 464,754tc in 2011/12 against a target of 651,600tc; while the non-contract farming has been on the rise from 45,133tc to 81,338tc over the same period (FAO, 2013).The continuous production shortfalls is likely to hurt the sugar industry in Kenya; since the country is already a net importer of sugar to meet the domestic consumption.

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Item Type: Kenyan Topic  |  Size: 75 pages  |  Chapters: 1-5
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