28.01.2015 Views

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

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

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

SHOW MORE
SHOW LESS

Create successful ePaper yourself

Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.

Figure 5b. Monthly average wholesale prices for wheat (birr/100 kgs., 1999 and 2001)<br />

maize 1999 maize 2001<br />

180<br />

90<br />

160<br />

80<br />

140<br />

70<br />

120<br />

60<br />

100<br />

50<br />

80<br />

40<br />

60<br />

30<br />

40<br />

20<br />

january<br />

february<br />

march<br />

april<br />

may<br />

june<br />

july<br />

august<br />

september<br />

october<br />

november<br />

december<br />

20<br />

10<br />

0<br />

0<br />

Figure 5c. Monthly average wholesale prices for maize (birr/100kgs., 1999 and 2001)<br />

Source: Central Statistical Authority, various issues.<br />

When gra<strong>in</strong> prices are substantially reduced, it discourages farmers from apply<strong>in</strong>g chemicals<br />

to prevent pest attacks, lead<strong>in</strong>g to even larger crop losses than usual. This is because the<br />

marg<strong>in</strong>al benefit as a result <strong>of</strong> chemical treatment could be less than the marg<strong>in</strong>al cost <strong>of</strong> the<br />

treatment. For example, dur<strong>in</strong>g the 2001/02 crop season, maize prices were reduced by as<br />

much as 80 percent, as a result <strong>of</strong> a 40 percent <strong>in</strong>crease <strong>in</strong> output. Under such circumstances,<br />

crop prices might be so unattractive that farmers would not even pay the transport charges to<br />

take their gra<strong>in</strong> to the nearest market place for sale.<br />

7.2. Regression Results<br />

Table 13 presents the Tobit regression results. Note that nonbag storage capacities were not<br />

significant. Education also was not significant <strong>in</strong> expla<strong>in</strong><strong>in</strong>g variations <strong>in</strong> the dependent<br />

variable. Similarly, farmers’ expectations <strong>of</strong> gra<strong>in</strong> loss were found to be not statistically<br />

significant.

Hooray! Your file is uploaded and ready to be published.

Saved successfully!

Ooh no, something went wrong!