EU food-safety standards, pesticide use and farm level productivity: the case of high-value crops in Kenya

Abstract

This article provides an empirical analysis of the impact of European Union (EU) private food safety standards on pesticide use and farm-level productivity among small-scale vegetable producers in Kenya. We apply an extended three-stage damage control production framework, accounting for multiple endogeneity problems, to farm-level data collected from a random cross-sectional sample of 539 small-scale producers. Estimation results show that farmers producing vegetables for the domestic market use significantly lower quantities of pesticides than do export farmers. However, contrary to findings elsewhere, the econometric evidence here shows that both domestic and export-oriented vegetable farmers in Kenya use pesticides at levels below the economic optimum. The results also show that the adoption of standards by export farmers does not have any significant impact on total pesticide use. However, adopter categories are distinguishable in terms of types of pesticide used, i.e. adopters use safer pesticides based on World Health Organization (WHO) classification. The third-stage structural revenue model results demonstrate that adoption of standards has a positive and significant impact on revenue raised in vegetable production. Nevertheless, farmers producing for the export market are indistinguishable from those producing for the domestic farmers in terms of the total revenue earned from producing vegetables during the rainy season, on a'per acre' basis. Although standards can potentially prevent resource-poor smallholders from maintaining their position in the lucrative export markets, they can also result in positive changes in the production systems of those small-scale farmers who adopt it, as shown by these results