Smallholder Farmers’ Decision and Level of Participation in the Potato Market in Uganda


Smallholder potato farmers in Uganda face many production and marketing challenges including limited access to markets and low surpluses for sale into the market. This study sought to underscore the factors that influence smallholder farmers’ decision to participate in the potato market and level of participation in such markets. Data were collected from 200 smallholder potato farmers in Kabale and Mbale districts. Descriptive statistics and a two-stage Heckman model were used to analyse the data. Results indicated that proximity to a village market positively and significantly (p ≤ 0.05) influenced decision to participate in the potato market. Results of the second stage of the model indicated that non-farm income earned negatively and significantly (p ≤ 0.01) affected the potato farmer’s level of market participation.

Share and Cite:

Sebatta, C. , Mugisha, J. , Katungi, E. , Kashaaru, A. and Kyomugisha, H. (2014) Smallholder Farmers’ Decision and Level of Participation in the Potato Market in Uganda. Modern Economy, 5, 895-906. doi: 10.4236/me.2014.58082.

Conflicts of Interest

The authors declare no conflicts of interest.


[1] FAO (2008) Workshop to Commemorate the International Year of Potato. Bangkok, 6 May 2008 Proceedings.
[2] Schwartzmann, M. (2010) Potato—A World Production, a European Business. 12th Euro Blight Workshop Arras, France, 3-6 May 2010, 11-16.
[3] Kinyua, Z.M., Bararyenya, A., Schulte-Geldermann, A., Obura, B.O., Kashaija, I.N., Tindimubona, S., Opio, F., Oyena, D., Rwomushana, I., Murithi, W.M., Kinoti, J., Namugga, P., Kimoone, G., Inamahoro, M., Niko, N. and Ndayihanzamaso, P. (2008) Overcoming Seed Potato Quality Constraints to Tackle Food Insecurity and Poverty in Eastern and Central Africa in the 21st Century. African Crop Science journal, 9, 279-285.
[4] Ferris, R.S.B., Okoboi, G., Crissman, C., Ewell, P. and Lemaga, B. (2001) Uganda’s Irish Potato Sector. IITA-FOODNET, CIP, PRAPACE, CGIAR and ASARECA at the Government of Uganda’s Conference on Competitiveness of Selected Strategic Exports.
[5] Jari, B. and Fraser, G.C.G. (2009) An Analysis of Institutional and Technical Factors Influencing Agricultural Marketing amongst Smallholder Farmers in the Rift Valley, Eastern Cape Province, South Africa. African Journal of Agricultural Research, 4, 1129-1137.
[6] Ruijs, A., Schweigman, C. and Lutz, C. (2004) The Impact of Transport and Transaction-Cost Reductions on Food Markets in Developing Countries: Evidence from Tempered Expectations for Burkina Faso. Elsevier Agricultural Economics, 31, 219-228.
[7] Nkonya, E. and Kato, E. (2001) Agricultural Input Marketing in Uganda International Food Policy Research Institute (IFPRI). The IFPRI Policy Workshop, Kampala, 25-26 June 2001.
[8] Aliguma, L., Magala, D. and Lwasa, S. (2007) Uganda: Connecting Small-Scale Producers to Markets: The Case of the Nyabyumba United Farmers Group in Kabale District. Regoverning Markets Innovative Practice series, IIED, London.
[9] Okoboi, G. (2001) The Marketing Potential of Potatoes in Uganda and Market Opportunities for Rwanda. International Institute of Tropical Agriculture, Ibadan.
[10] World Bank (2008) World Development Report, Agriculture for Development. The World Bank, Washington DC.
[11] Wang’ombe, J.G. (2008) The Potato Value Chain in Kenya and Uganda. Maastricht School of Management, DBA Assignment.
[12] Ministry of Finance Planning and Economic Development, MFPED (2004) Background to the Budget for Financial Year 2004/05 “Promoting Economic Growth and Reducing Poverty through Public Expenditure” (Abstract), MFPED, Kampala.
[13] FAO (2010) Strengthening Potato Value Chains, Technical and Policy options for Developing Countries. The Food and Agriculture Organization of the United Nations and the Common Fund for Commodities. Rome.
[14] Jagwe, J.N. (2011) Impact of Transaction Costs on the Participation of Smallholder Farmers and Intermediaries in the Banana Markets of Burundi, Democratic Republic of Congo and Rwanda. Ph.D. Thesis (Agricultural Economics), University of Pretoria, Pretoria, submitted.
[15] Shepherd, A. (2007) Approaches to Linking Producers to Markets. Agricultural Management, Marketing and Financial Occasional Paper 13. Food and Agricultural Organisation of the United Nations, Rome. Rural Infrastructure and Agro-Industries Division.
[16] Njuki, J., Kaaria, S., Sanginga, P., Kaganzi, E. and Magombo, T. (2006) Empowering Communities through Market Led Development. Community Agro-Enterprise Experiences from Uganda and Malawi.
[17] Jaleta, M., Gebremedhin, B. and Hoekstra, D. (2009) Smallholder Commercialisation: Processes, Determinants and Impact. Discussion Paper No. 18: Improving Productivity and Market Success of Ethiopian Farmers, Improving Market Opportunities, International Livestock Research Institute, Nairobi.
[18] Holden, S.T. and Binswanger, H. (1998) Small-Farmer Decision Making, Market Imperfections, and Natural Resource Management in Developing Countries. In: Lutz, E., Binswanger, H., Hazell, P. and McCalla, A., Eds., Agriculture and the Environment. Perspectives on Sustainable Rural Development, The World Bank, Washington DC, 50-70.
[19] Jagwe, J.N., Ouma, E. and Machethe, C. (2009) Transaction Costs and Smallholder Farmers’ Participation in Banana Markets in the Great Lakes Region. Centre of Evaluation for Global Action, UC Berkeley.
[20] Eskola, E. (2005) Commercialisation and Poverty in Tanzania: Household-Level Analysis. Discussion Paper, Department of Economics, University of Copenhagen, Copenhagen.
[21] Gebremedhin, B. and Hoekstra, D. (2007) Cereal Marketing and Household Market Participation in Ethiopia: The Case of Teff, Wheat and Rice. AAAE Conference Proceedings, 2007, 243-252.
[22] Lerman, Z. (2004) Policies and Institutions for Commercialization of Subsistence Farms in Transition Countries. Journal of Asian Economics, 15, 461-479.
[23] Boughton, D., Mather, D., Barrett, C.B., Benfica, R., Danilo, A., Tschirley, D. and Cunguara, B. (2007) Market Participation by Rural Households in a Low-Income Country: An Asset-Based Approach Applied to Mozambique. Department of Agricultural Economics, 213 E Agriculture Hall, Michigan State University, East Lansing.
[24] Barret, C.B. (2007) Smallholder Market Participation: Concepts and Evidence from Eastern and Southern Africa. Food Policy, 4, 33.
[25] Pravakar, S., Castellanos, I.V. and Rahut, D.B. (2010) Commercialization of Agriculture in the Himalayas. IDE Discussion Paper No. 265.
[26] Enete, A.A. and Igbokwe, E.M. (2009) Cassava Market Participation Decision of Producing Households in Africa. Tropicultura, 27, 129-136.
[27] Omiti, J.M., Otieno, D.J., Nyanamba, T.O. and McCullough, E. (2009) Factors Influencing the Intensity of Market Participation by Smallholder Farmers: A Case Study of Rural and Peri-Urban Areas of Kenya. African Journal of Agricultural and Rural Economics, 3, 57-82.
[28] Johnson, M., Hazell, P. and Gulati, A. (2003) The Role of Intermediate Factor Markets in Asia’s Green Revolution: Lessons for Africa? Bruce Gardner, University of Maryland, College Park, Maryland.
[29] Jayne, T.S., Mather, D. and Mghenyi, E. (2010) Principal Challenges Confronting Smallholder Agriculture in Sub-Saharan Africa. World Development, 38, 1384-1398.
[30] Heckman, J.J. (1979) Sample Selection Bias as a Specification Error. Econometrica, 47, 153-161.
[31] Goetz, S.J. (1992) A Selectivity Model of Household Food Marketing Behaviour in Sub-Saharan Africa. American Journal of Agricultural Economics, 74, 444-452.
[32] Heltberg, R. and Tarp, F. (2001) Agricultural Supply Response and Poverty in Mozambique. Institute of Economics, University of Copenhagen: Studiestraede, Copenhagen.
[33] Winship, C. and Mare, R.D. (1992) Models for Sample Selection Bias. Annual Review of Sociology, 18, 327-350.
[34] Olwande, J. and Mathenge, M. (2012) Market Participation among Poor Rural Households in Kenya. The International Association of Agricultural Economists (IAAE) Triennial Conference, Foz do Iguacu, 18-24 August 2012.
[35] Green, W.H. (2003) Econometric Analysis. 5th Edition, Prentice Hall, Bergen County, NJ.
[36] COMESA (2010) Smallholder Marketing Behaviour and Urban Consumption Patterns in Eastern and Southern Africa. COMESA Alliance for Commodity Trade in Eastern and Southern Africa.
[37] Lien, G., Kumbhakar, S.C. and Hardakar, J.B. (2010) Determinants of Off-Farm Work and Its Effects on Farm Performance: The Case of Norwegian Grain Farmers. Journal of Agricultural Economics, 41, 577-586.
[38] Vigneri, M. and Vargas, H.R. (2011) Mainstreaming Gender Sensitivity in Cash Crop Markets Supply Chains. Working Paper No. 11-08, ESA, FAO.
[39] Doss, C.R. (2001) Designing Agricultural Technology for African Women Farmers: Lessons from 25 Years of Experience. World Development, 29, 2075-2092.
[40] Srivastava, L. (1995) Cash Crop Adoption by Peasant Households: An Empirical Analysis from the Middle Mountains of Nepal. A Master of Science Thesis, University of British Columbia, Vancouver.
[41] Fletschner, D.K. and Zepeda, L. (2002) Efficiency of Small Landholders in Eastern Paraguay. Journal of Agricultural and Resource Economics, 27, 554-572.
[42] Von Oppen, M., Njehia, B.K. and Ijaimi, A. (1997) POLICY ARENA the Impact of Market Access on Agricultural Productivity: Lessons from India, Kenya and the Sudan. Journal of International Development, 9, 117-131.<117::AID-JID416>3.0.CO;2-T
[43] Odulaja, A. and Kiros, F.G. (1996) Modelling Agricultural Production of Small-Scale Farmers in Sub-Saharan Africa: A Case Study in Western Kenya. Agricultural Economics, 14, 85-91.
[44] Cadot, O., Dutoitz, L. and Olarreagax, M. (2006) How Costly Is It for Poor Farmers to Lift Themselves Out of Subsistence? World Bank Policy Research Working Paper 3881, SSRN.
[45] Makhura, M.T. (2001) Overcoming Transaction Costs Barriers to Market Participation of Smallholder Farmers in the Northern Province of South Africa. A PhD Thesis Submitted in Partial Fulfillment of the Requirements for the Degree of in the Department of Agricultural Economics, Extension and Rural Development Faculty of Natural and Agricultural Sciences University of Pretoria, Pretoria, June 2001.
[46] Rios, A.R., Shively, G.E. and Masters, W.A. (2008) Linkages between Market Participation and Productivity: Results from a Multi-Country Farm Household Sample. The AAEA Annual Meeting, Orlando, Florida, 27-29 July 2008.
[47] Poulton, C. and Leavy, J. (2007) Commercialisations in Agriculture. A Working Paper, Future Agricultures, School of Oriental and African Studies (SOAS), University of London, London.
[48] Reardon, T., Timmer, P.C., Barret, C.B. and Berdegue, J. (2003) The Rise of Supermarkets in Africa, Asia and Latin America. American Journal of Agricultural Economics, 85, 1140-1146.
[49] Abera, G. (2009) Commercialisation of Smallholder Farming: Determinants and Welfare Outcomes. A Cross Sectional Study in Enderta District, Tigrai Ethiopia. Masters Thesis, The University of Agder, Kristiansand.
[50] Fischer, E. and Qaim, M. (2012) Gender, Agricultural Commercialisation, and Collective Action in Kenya. The International Association of Agricultural Economists (IAAE) Triennial Conference, Foz do Iguacu, 18-24 August 2012.

Copyright © 2022 by authors and Scientific Research Publishing Inc.

Creative Commons License

This work and the related PDF file are licensed under a Creative Commons Attribution 4.0 International License.