Analysis of Profitability of Sorghum Contract Farming: A Case in Laikipia County

Abstract

Sorghum farming has been promoted in Kenya as an alternative crop in the semi-arid areas due to its ability to tolerate harsh weather condi­tions. This study assessed the profitability and the factors influencing the profitability of sorghum farming among the contract farming (CF) participants and non-participants in Laikipia County from 188 respondents selected using a multistage sampling. The study used gross margins approach and multiple linear regression (MLR) to assess profit and factors influencing profitability. The return on investment (ROI) among the participants of CF was 1.69 with an annual net profit per acre of Kes 57170. Among the CF non-participants, the significant determinants of profitability included age, education, and land acreage. The determinants of profitability among the CF participants included education, land acreage, and credit access. The agricultural education extension officers and Necco Fosa Cooperative Society agents should collaborate to encourage more farmers to access credit because it significantly increases the profitability of the enterprise under CF. Department of Social Services of Laikipia county government should formulate strategies to encourage more participation into social groups that may increase profitability of CF farming.

DOI: 10.7176/JESD/13-10-03

Publication date:May 31^st 2022