Adding Value at the Farm: The Case of Smallholder Potato Farmers in the Highlands of Uganda
Christopher Sebatta *
Department of Agribusiness and Natural Resource Economics, Makerere University, P.O. Box-7062, Kampala, Uganda.
Johnny Mugisha
Department of Agribusiness and Natural Resource Economics, Makerere University, P.O. Box-7062, Kampala, Uganda.
Enid Katungi
Pan-African Bean Research Alliance, National Agricultural Research Laboratories – Kawanda, Uganda. P.O. Box-6247, Kampala, Uganda.
Apolo K. Kasharu
Faculty of Science and Technology, Uganda Christian University, Uganda.
Harriet Kyomugisha
Department of Agribusiness and Natural Resource Economics, Makerere University, P.O. Box-7062, Kampala, Uganda.
*Author to whom correspondence should be addressed.
Abstract
This study set out to find out the profitability of engaging in activities that add value to the smallholder farmer’s potato produce after harvest so that it fetches a better price to improve on household income. The study was a survey where structured pre tested questionnaires were administered to potato farmers.
Data were collected from 200 smallholder potato farmers in the highland districts of Kabale and Mbale in two potato growing seasons between December 2011 and August 2012. Thirty farmers were randomly selected from each of the two parishes in Wanale to give a sub-sample of 60 farmers from Mbale district. On the other hand, 35 farmers were randomly selected from each of the four parishes in Kabale district giving a total sub-sample of 140 farmers, and 60 farmers from Mbale district. Descriptive statistics, breakeven analysis and a bivariate probit model were used to analyse the data.
Results indicated that 23% of all farmers had added value to seed potato while 88.5% had added value to table (ware potato). Kabale had a significantly higher number of farmers (P<0.01) adding value to seed potato than Mbale while the reverse was true for ware potato. Results of the break even analysis showed that value addition to both ware and seed potato at the farm was profitable with value adding farmers earning 40% more than those who did not add value. Bivariate probit results indicated that how much a farmer harvested influenced their decision to add value to ware potato while access to extension services significantly and positively influenced value addition to seed potato.
Adding value to potato at the farm is therefore a profitable venture that can be used to increase household incomes according to these results.
Keywords: Highland farmers, value addition, profitability, Bivariate Probit model