Impacts of Trade Liberalization on Kenya's Maize Sector

Kenya like most other developing countries has been
reforming her staple grain markets since 1986. The
reforms were envisaged to improve the sectors terms
of trade as a means of stimulating food production.
However, the impacts of trade reforms on Kenya s
maize sector remain controversial.

This book evaluates the welfare impacts of trade
liberalization and their distributional effects on
stakeholders in Kenya s maize sectorusing a partial
equilibrium model (PEM) of trade, which accounts for
market interrelationships at the farm, wholesale and
retail levels is developed.

The simulations results suggest that tariff
reductions yield price decreases across the three
market levels. The declining prices increase maize
consumption but reduce domestic production.
Consequently, consumer surplus increases while
producer surplus decreases. However, the gain in
consumer surplus is not sufficient to compensate the
loss in producer surplus. Kenya s implementation of
the Uruguay Round trade liberalization commitments
leaves the maize sector worse off and cannot be
considered as a viable policy based on Herberger s
postulates.

Autorentext
Jonathan Nzuma is a lecturer at the Department of Agricultural
Economics, University of Nairobi, Kenya. He holds a PhD in
Agricultural Economics from the University of Guelph, Canada.
His research interests are in the areas of agricultural policy,
international trade and commodity markets.

Klappentext
Kenya like most other developing countries has been reforming her staple grain markets since 1986. The reforms were envisaged to improve the sectors terms of trade as a means of stimulating food production. However, the impacts of trade reforms on Kenya's maize sector remain controversial. This book evaluates the welfare impacts of trade liberalization and their distributional effects on stakeholders in Kenya's maize sectorusing a partial equilibrium model (PEM) of trade, which accounts for market interrelationships at the farm, wholesale and retail levels is developed. The simulations results suggest that tariff reductions yield price decreases across the three market levels. The declining prices increase maize consumption but reduce domestic production. Consequently, consumer surplus increases while producer surplus decreases. However, the gain in consumer surplus is not sufficient to compensate the loss in producer surplus. Kenya's implementation of the Uruguay Round trade liberalization commitments leaves the maize sector worse off and cannot be considered as a viable policy based on Herberger's postulates.