The Future of Smallholder Farming in Eastern Africa - Uganda ...

1.4. Research questions
This study is intended to address a number of empirical questions. The first set of questions
concerns the characteristics of traders. What is the mix of petty and large-scale traders If
petty traders dominate the market, do they have the financial resources and storage capacity
to tackle seasonal price fluctuations Are small-scale traders professional or seasonal/parttime
Do large-scale traders have networks among themselves and with brokers, and are
large-scale traders linked with producers and processors
The second area concerns buying and selling practices. 1 Are there formal and informal
marketing or producer groups that affect bargaining power What buying practices are in
place (e.g., auction sale, contract sale, or first-come/first-serve) What distribution channels
are used Are traders capable of providing marketing services for the whole country at
reasonable prices Are there observed unethical trading practices (e.g., short weights,
misleading price quotations, usurious practices) If suppliers’ credit is provided, what are the
frequency and terms of payment
The third set of questions concerns pricing behavior. Who sets prices (e.g., one buyer or
many buyers) How are prices set (what is the degree of personal contact among market
participants) What is the basis for price differentiation How do prices adjust under the
prevailing market conditions Are there constraints in the use of specific market channels
Does the physical location of the market affect prices and marketing arrangements
The fourth area of investigation is the relationship between regional traders (supplying the
central market) and brokers. How does the principal-agent arrangement influence the conduct
of the market How is conflict of interest avoided when brokers also act as wholesalers Do
wholesalers have the capacity to buy from regional traders and then supply all buyers at the
central market (both retailers and large consumers)
The fifth area is private traders’ effectiveness and competitiveness. Competitiveness and the
integration of markets can be analyzed through the variability of prices between locations and
between seasons. What are the determinants of daily market prices Are the market margins
excessive How do processors and consumers feel about the grain marketing services
Sixth, civil society organizations have been given a prominent role in recent discussions on
liberalization. Are there trader organizations that safeguard traders’ interests or provide basic
services, such as credit facilities and business training How do the Addis Ababa and the
national chamber of commerce assist grain traders
Finally, private traders are always subjected to government policy measures. The policy
environment consists of regulatory measures, support measures, and taxation. Regulatory
measures strive to enhance competition among traders and, at the same time, to guarantee the
minimum quality of the product. Is the policy environment conducive to grain trade Are
there barriers to entry and exit, expansion, and modernization associated with policy and
1 See, for instance, R. S. Pomeroy and A. C. Trinidad, Industrial organization and market analysis: Fish
marketing, in Prices, products, and people: Analyzing agricultural markets in developing countries, ed. G. I.
Scott (Boulder, Colo., USA: Lynne Reinner: 1995).