Poverty, Gender, and Institutional Arrangements
3. Does Commercialization of Smallholder Horticulture Reduce Rural Poverty? Evidence from Household Panel Data in Kenya
Commercialization of smallholder agriculture is viewed as a pathway towards economic growth and development in many developing countries that have agriculture dependent economies (von Braun et al., 1994; Pingali & Rosegrant, 1995; Pingali, 2007). Commercialization and the diversification of horticulture, especially of high-value crops, have been identified in the past two decades as one of the fastest growing agricultural sub-sectors in Sub-Saharan Africa (Gioè, 2006; Afari-Sefa, 2007; Henson & Jaffee, 2008). Until 2008, horticultural exports have been growing at an impressive rate in Kenya (Figure 1.1). As a result of this remarkable growth, policy makers, donors, and researchers perceive the rapid growth of the sub-sector as a viable “pro-poor” rural development strategy, assuming that the growth is reaching rural smallholders, the majority of whom are involved in horticulture. However, there are concerns regarding the perceived impacts of horticulture on rural smallholders.
The first concern is that smallholder farmers are being forced out of the horticultural business. With the increasing integration of developing countries in global market trade, there are emerging forms of non-tariff barriers such as food quality and safety standards for which compliance may be cost prohibitive to small producers (Dolan & Humphrey, 2000; Jaffee, 2003; Henson & Reardon, 2005; Jaffee et al., 2005; Okello, 2005; Muriithi et al., 2010a). As a result, past studies have found that exporters are increasingly shifting away...
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