Determinants of smallholder farmers’ participation In the potato market in Kabale and Mbale

Abstract

This study was carried out in Kabale and Mbale districts of Uganda for the two potato growing seasons of 2011/2012. The study sought to underscore the factors that influence smallholder farmers’ decision to participate in the potato market and level of participation in such markets. It also aimed at developing potato farmer typologies basing on levels of market participation as well as assessing the profitability of farm level potato value addition. The study obtained data from a survey of 200 potato farmers selected from Kabale and Mbale using a multi-stage sampling process. Two econometric models were used to analyse the data; 1) An ordered probit model and descriptive statistics were used to characterize potato farmers as net sellers, net buyers and autarkic. 2) A two-stage selectivity model similar to a Heckman model was used in determining the degree of farmer participation in the potato market as net sellers. Breakeven analysis was used to determine breakeven points and prices in ware and seed potato marketing by smallholder farmers.

The study results indicate that the average potato yield in the study area is 5.83tons /ha which is far below 25 tons/ha achievable under full potential rain fed conditions. Results also show that number of extension visits and good road condition positively influenced net- selling rather than net buying or autarky among smallholders while farmer’s household size and having other food sources negatively influenced net selling. The two-step Heckman model results revealed that price of potato, farmer’s age, education level, number of extension visits and proximity to a village market positively and significantly influenced decision to participate in the market. However, non-farm income negatively and significantly influenced potato volume sold in the market. Farmers who add value to either ware or seed potato operated above the break-even point and results indicated that post harvest potato value addition was profitable.