Resource use efficiency in potato production in South Western Uganda.

Abstract

Competition in the open market economy leads to exit of the less efficient firms. Hence to stay in business, firms must ensure efficient use of resources through optimal combination of enterprises to maximise profits. In this study, effort was made to find out if potato farmers in Kabale and Kisoro districts were optimally allocating their resources in the production of potatoes and four other competing enterprises. Using questionnaires, primary data on potato farmers’ socio-economic status, resource utilisation in production, production activities, capital inputs, costs, produce realisation and produce price were collected. Secondary data pertaining to the subject of study were also collected. The farmers were generally resource poor with less than 2.6 ha land holding, about 3 hoes and most had no cows, bicycle or knapsack sprayer. All potato farmers, sourced income from farming, had on average spent less than 6.7 years in school and majority (95%) owned land by customary tenure status. Through enterprise budgeting and gross margin analysis, it was found out that potato incurred the most hectare seed cost, hectare labour cost and subsequently most total hectare production cost. However, its high yield compared to other enterprises and fair price gave it the highest hectare produce value and highest per hectare gross margin. This led to the acceptance of the hypothesis that potato generates the highest returns to farmers in Kabale and Kisoro districts compared to other competing enterprises. Potato also had the biggest proportion of produce sold on the market. Using a linear programming model running under the GAMS computer program, the optimal farm resource allocation plan was designed and comparison made with the current farm plan. The results of optimisation indicate that potato farmers are currently operating at 69.6% and 70.9% levels of efficiency for Kabale and Kisoro districts respectively. This optimisation is by just reallocation of resources and enterprises without further increase in cost of production and assuming a stable price and production environment. However, if farmers are not limited by capital and enterprise acreage minimum requirement gross margin realisation can increase by 576.4% and 447.8% for Kabale and Kisoro districts respectively. However this would be very risky given single enterprise adoption and almost impossible given farmers current capital endowment. Further analysis shows that current food energy realisation is higher than energy that can be generated on optimisation and is also higher than the minimum household energy requirement. This is because on optimisation potato enterprise acreage increases and yet less of the potato enterprise is consumed at home.