Discussion Paper No. 04 of 2000 on Delivery of Services to Smallholder Coffee Farmers and Impacts on Production Under Liberalization in Kenya

Abstract

In a liberalized economy, provision of services in the agricultural sector, including financing of inputs, collection of produce, and processing and marketing of farmers' outputs, is a fundamental issue because it affects the efficiency of the entire agricultural sector. The current focus in liberalized policies is to replace a single vertically integrated system with a set of systems, each of which may be provided by a different enterprise. But liberalization of the delivery of services for the country's export crops may not necessarily lead to the establishment of competitive marketing and processing systems for small-scale producers since natural monopolies may emerge: Because of this, no alternative system may adequately replace the single channel in effectively providing services to farmers.