Abstract

Kaseva DM, Mulwa RM and Irungu P

Most arid and semi arid regions of Kenya have been experiencing deterioration in agricultural productivity translating to food insecurity and low levels of farm revenues. As a mitigation strategy, different agroforestry technologies have been innovated and disseminated to farmers in different agro-ecological zones. Since agricultural production is a risky activity, production risk should be taken into account, otherwise the policy briefs will be of little importance in real life. In a study sought to analyze the optimal agroforestry enterprise mix under production risk in Mbooni West district, first, it was necessary to evaluate the influence of production risk on net returns of various agroforestry enterprises. Then, the trade-off between the variability of net returns and expected returns to farm resources in the study area was determined. Multi-stage sampling was used and a semi structured questionnaire was administered through direct interviews. The paper applied an analytical procedure that made use of the conventional linear programming, and the Minimization of total absolute deviations (MOTAD) as the major tools. The results indicated that farmers in the study area are sensitive to production risk which influences their choice of farm enterprises and resource allocation. It was also confirmed that the farmers’ production decisions were not optimal but rational in the sense that they are risk minimizing. The study recommended the establishment of appropriate organizations and institutions that would cushion the small scale farmers against various forms of production risk.