@article{Ayieko:236218,
      recid = {236218},
      author = {Ayieko, Miltone Were and Songqing, Jin and Tschirley,  David},
      title = {Effects of smallholder diversification on rural household  maize security},
      address = {2016},
      number = {333-2016-14185},
      series = {Poster},
      pages = {1},
      year = {2016},
      abstract = {EFFECTS OF SMALLHOLDER DIVERSIFICATION ON RURAL HOUSEHOLD  FOOD SECURITY IN KENYA
ABSTRACT
Market-oriented economic  reforms are now at least 20 years old in most of  Sub-Saharan Africa (SSA).  Prior to these reforms, most  economies were fettered with far-ranging limits on  investment, private sector trade, and other initiatives,  and on the free movement of agricultural products over  space.  Kenya is a prime example of these earlier policies,  with limits on maize marketing, agricultural inputs  marketing and dairy marketing restrictions that were lifted  through the reforms. Over this same time, urban populations  and rural population densities have increased dramatically,  further broadening the scope for trade, and setting off the  process of agricultural transformation. In addition,  changes in the weather patterns have often affected  smallholder agricultural production and consumption  decisions. How have the rural farm households been affected  by these dramatically different policy, economic and  climatic environments, and how have these changes and  patterns shaped the welfare of rural households? 
The  effect of smallholder diversification in rural areas is  conjectured to be correlated to the agricultural  transformation process. In the absence of markets,  households are likely to rely solely on own production and  they tend to produce mainly for subsistence. As markets  begin to function, diversification is likely to increase  household income and wealth, but reduce the household’s  ability to be food-secure, especially if diversification  implies transferring resources from food crops to  commercial crops in response to market opportunities. But  as markets improve (or as land sizes increase), incomes are  likely to be increased through specialization, not  diversification, and households no longer have to rely on  self-sufficiency to be food-secure. More-specialized  households at this stage in the transformation process are  likely to be more food-secure. Moreover, studies also show  that climate change may affect a farm household choice of  income activities that ultimately determine the household  welfare. This is more so pertinent in the case of rural  household food security. Despite receiving considerable  attention in the developing countries, food security  continues to be a major challenge. In SSA, for example, it  is estimated that about one-quarter of the population, most  of whom reside in rural areas where agriculture is the  mainstay, are faced with chronic food insecurity. In  addition, most rural househlds follow highly diversified  agricultural an livelihood portfolios in response to  potential risks such as uncertain weather. Yet fewer  studies have investigated the effect of smallholder  diversification on rural smallholder food security.

The  purpose of the study is to determine the welfare effects of  crop, agricultural and livelihood diversification on farm  households food security. It is hypothesized that  households diversify income portfolios in order to mitigate  the risks to food security. Therefore, the overall  objective of this essay is to investigate the welfare  effects of agricultural and livelihood diversification at  the household level. The specific objectives for the study  are to:  (a) determine the welfare effects of crop,  agricultural and livelihood diversification on rural  household food security in the presence of rainfall stress  and policy reforms of the 1990s, and (b) examine  heterogeneity in household welfare effects of livelihood  diversification between groups of households. 
Using a  five-period panel data of 1,243 rural farm households from  Kenya collected between 1997 and 2010, this study  investigates welfare effects of agricultural and livelihood  diversification among smallholder farmers in rural Kenya.  Dynamic Panel Data method will be used to investigate the  effects of smallholder diversification on rural household  food security. The dynamic panel data model is appropriate  since it allows for separation of the true state  dependence, observed and unobserved heterogeneity. The  model assumes no serial correlation of the error term but  not independence. 
Because of potential endogeneity problem  caused by, a) the inclusion of the lagged dependent  variable and, b) the potential endogeneity of some  right-hand side variables, a test for validity of the  instrumental variables will be carried out using the Sargan  test of overidentifying restrictions. In addition, a test  of no serial correlation in the error terms (Arellano-Bond  test) will be carried out to ensure correct specification  of the model. Household food security (the dependent  variable) will be proxied by the amount of maize calories  available for consumption at the household per adult  equivalent.},
      url = {http://ageconsearch.umn.edu/record/236218},
      doi = {https://doi.org/10.22004/ag.econ.236218},
}