Working Paper

Economy-wide Impacts of Promising Maize and Wheat Technologies on Food Security and Welfare in Kenya

A recursive dynamic economy-wide model incorporating productivity changes due to the
introduction of promising maize and wheat varieties evaluates foresights for future food
security, well-being and economic performance in Kenya. Adoption of promising new maize
and wheat varieties not only increases overall economic growth and food availability, it also
reduces import dependency and increases the welfare of vulnerable populations, especially
rural households in lowland regions. Although maize-producing rural households in the
highlands do not gain in terms of real incomes because of declining land income, they benefit
from the increased food consumption stimulated by lower food prices. Promising maize
technologies will have positive spill-over effect on all crops, mainly on wheat, and have larger
positive impact on food security than the expected productivity change from the current
promising wheat varieties. Although the lowland economy does not benefit from the adoption
of new crop technologies, rural households in this region benefit the most in terms of increases
in food and non-food consumption. The welfare gain in terms of food security is further
amplified when technological change for the two crops is complemented by a reduction in
the marketing costs, which facilitates market access for the increased surplus and further
reduces domestic prices. With low marketing costs resulting from reduced trade and transport
margins for these two crops, even highland maize producing households experience an
increase in real income and the demand for both food and non-food commodities increase
substantially, generating significant linkages between agriculture and other sectors.