African Journal of Agricultural Economics and Rural Development

African Journal of Agricultural Economics and Rural Development ISSN: 2375-0693 Vol. 9 (7), pp. 001-017, July, 2021. © International Scholars Journals

Full Length Research Paper

Can Livelihood Capitals Promote Diversification of Resource-Poor Smallholder Farmers Into Agribusiness? Evidence from Nyando and Vihiga Counties, Western Kenya

Mwehe Mathenge1*, B.G.J.S Sonneveld2 and J.E.W. Broerse2

1School of Planning and Architecture, Maseno University, Private Bag, Maseno, Kenya. Tel (254 724 302 883)

2Athena Institute, Faculty of Science, Vrije Universiteit Amsterdam, De Boelelaan 1085, 1081, HV, Amsterdam, The Netherlands.

Accepted 07 February, 2021


The push towards the transformation of rural smallholders’ subsistence production into market-oriented agribusiness has been in the public policy debates of many low- and middle-income countries, including Kenya. While various studies have highlighted the lack of livelihood capitals as a reason for most smallholders not to diversify into agribusiness, how these livelihood capitals influence smallholders’ decisions and choices have, however, only been partially researched. Using systematic random sampling, 392 households in Western Kenya were interviewed through a researcher administered questionnaire. Multinomial logistic regression method was used to analyse the data. The findings reveal that livelihood capitals acted in parallel and jointly to determine the decisions of smallholders to participate in agribusiness. Results shows that education level, gender, landholding size, distance to markets, farm input access, and agriculture extension services positively and significantly influenced the decision choices of households to participate in agribusiness. Households with higher livelihood capitals accumulation resulted in a higher probability of participating in agribusiness while those with limited livelihood capitals resulted in a lower probability to participate in agribusiness. We argue that designing appropriate pro-poor targeted policy interventions to improve poor household’s livelihood capitals could address the problem of non-participation of rural smallholders’ in agribusiness markets.

Keywords: Livelihood capital, smallholder farmers, market participation, agribusiness markets, food security.