Market participation and profitability of maize production by smallholder farmers in Masindi and Hoima Districts of Uganda

Abstract

Maize production is a strategic enterprise in Uganda because of its increasing contribution to household incomes, foreign exchange and food security. The crop is increasingly becoming a staple food for many people especially in urban areas. However, low commercialization especially among smallholder farmers has continued to be a hindrance to the crop priority status in terms of contribution to household income and getting farmers out of poverty. Using the survey data from 294 maize farming households obtained from the Agricultural Model Intercomparison and Improvement Project under Makerere University Department of Agribusiness and Natural Resources Economics, the study sought to characterise smallholder maize farmers in the two districts according to their market participation status, assess the factors that influence market participation, determine the level of profits in maize production and the factors that influence maize profitability among smallholder farmers in Masindi and Hoima districts of Uganda. The results indicated that participants and non-participants differed based on characteristics such as: sex of the farmer, fertilizer use and type used, use of improved seed, age of the farmer, area under maize production, years of schooling, household size, quantity of maize produced and maize production costs faced by farmers. Results also showed that education of the farmer, distance to market, area under maize production, use of improved seed, ownership of a phone or radio and price per kilogram of maize influenced the decision of the farmer to participate in the market. In addition, factors such as distance to the market, area under maize production, sex of the farmer and education of the farmer influenced the levels of profits in maize production among smallholder farmers. The study thus recommends that more emphasis should be put on use of improved technologies such as use of improved seeds and fertilizers so as to increase the yields that would result into increased market participation. The government should also increase access to production and market information through extending agricultural extension services to the farmers as this would be important in keeping the farmers informed about the new technologies available and the available markets for their produce. In addition to this, government through Operation Wealth Creation (OWC) and other development partners should ensure better access to output markets through establishment of market facilities near farming communities so as to reduce distance to markets and transport costs. There is need for increased investment in agricultural mechanization to enable farmers open more land in time and improve their production and hence profits.