Economic analysis of mitigating aflatoxins in groundnuts in Eastern Uganda

Abstract

This study was conducted to determine the cost of mitigating aflatoxin contamination in groundnuts in Uganda. The study relied on primary data collected from 216 groundnut farmers and 113 groundnut traders in the districts of Tororo, Soroti, Busia, Jinja, and Iganga using proportional random sampling. The study relied on descriptive statistics and multinomial regressions to achieve its objectives. The determination of the cost of mitigating aflatoxin contamination was computed as a summation of extra cost of drying, sorting, shelling and storing that were saved and “extra benefit got due to reduced losses from discarding and selling spoilt groundnuts at a reduced value. The sampled farmers applied on average one strategy to mitigate aflatoxins in groundnuts while the traders applied two strategies. The study found the majority of the farmers and traders of groundnuts applied sorting and drying of groundnuts on tarpaulin as a means of mitigating aflatoxins. The sex of the farmer, duration of storage of groundnuts, annual groundnuts income and access to seed from government institutions were the only significant factors that influenced the farmer’s choice to apply aflatoxin mitigation strategies, while annual groundnut income and awareness about aflatoxin contamination were found to significantly influence the trader’s choice to apply aflatoxin mitigation strategies. The findings also showed that both the farmers and traders who applied aflatoxin mitigation strategies realised more net-losses than their counterparts who did not apply. The market price differential between good and spoilt groundnuts was not sufficient enough to reward those who applied aflatoxin mitigation strategies, thus they ended up as net losers. Therefore, there is need to provide a price incentive to farmers and traders who mitigate aflatoxin in groundnuts. This can be done through policies which ensure that farmers and traders who apply aflatoxin mitigation strategies get better prices than their counterparts who do not apply.