Profitability of pineapple production in Kayunga District, Central Uganda

Abstract

Pineapple is one of the crops in the fruit sub sector that has been selected for export diversification and sustainable enhancement of household incomes. As a result many farmers in most parts of the country have taken on pineapple production. However, this is being done without documented evidence of its profitability at the farm level, yet farmers’ standards of living and growth potential of any farm business are dependent on the profit levels of the selected enterprises. This study was conducted in Kayunga district, Central Uganda to determine pineapple profitability at the farm level, and to assess the factors that influence the profitability of pineapple production, with the aim of providing reliable information to guide farmers’ investment decisions. Profitability in this study is measured by Net Present Value (NPV). The study uses primary data collected from a sample of 192 farmers categorized according to size (small and large scale farmers) using a detailed structured questionnaire. Results show that pineapple farmers are getting large and positive NPVs, an implication that pineapple production is profitable both at small and large scale levels, with small scale farmers getting higher but statistically insignificant NPVs than large scale farmers. The study also uses univariate analytical methods to test for differences between the two farmer categories. The major differences are in the yield per hectare and unit cost of production. The yield per hectare and unit cost of production for small scale farmers are significantly higher (P < 0.01) than for large scale farmers. Regression results show that farmers’ experience, having off farm income, membership to organizations, access to agricultural extension, family labor endowment and possession of land title have a positive influence on pineapple profitability, while household dependency ratio and use of hired labor have a negative effect. This study provides strong empirical evidence that pineapple production is profitable and can enhance incomes among the rural households. Deliberate efforts should therefore, be made to promote its production in all parts of Uganda with suitable ecological conditions. To increase profitability, farmers need to reduce on hired labor use and invest in labor saving technologies such as herbicides. They also need to intensify land use through land augmenting technologies such as using fertilizers, high yielding crop varieties, and nitrogen fixing legumes to enhance profitability. In addition, farmers need to embrace value addition initiatives such as solar drying, embark on improved and timely farm management practices to increase marketable yield. The study also recommends fostering strong farmer institutions, such as production and marketing cooperatives to increase profitability and incomes through collective action.