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The impact of coffee price changes on rural households in Uganda


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  • Maurizio Bussolo
  • Olivier Godart
  • Jann Lay
  • Rainer Thiele


Employing household survey data covering the periods 1992-1993, 1995-1996, and 1999-2000, this article shows for the case of Uganda that a coffee market liberalization followed by a price boom was associated with substantial reductions in poverty, which could even be sustained when prices went down again. Coffee is not planted by the richest farmers and the gains from higher coffee prices accrued to poorer and richer coffee farmers alike. Nor were poorer farmers hurt disproportionately when prices fell. In addition, we find strong spillovers from coffee production to other agriculture, which tends to favor the poor, and to nonagricultural activities. These multiplier effects are concentrated in coffee regions. In an economic environment characterized by a booming agricultural sector, coffee farmers were able to accommodate the negative price shock, in particular through agricultural diversification. General agricultural growth also cushioned possible negative multiplier effects in coffee regions. Overall, the case of coffee in Uganda thus lends support to the view that agricultural trade liberalization is beneficial for the poor. Copyright 2007 International Association of Agricultural Economists.

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Bibliographic Info

Article provided by International Association of Agricultural Economists in its journal Agricultural Economics.

Volume (Year): 37 (2007)
Issue (Month): 2-3 (09)
Pages: 293-303

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Handle: RePEc:bla:agecon:v:37:y:2007:i:2-3:p:293-303

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  1. Marcel Fafchamps & Ruth Vargas Hill, 2004. "Selling at the farm-gate or travelling to market," CSAE Working Paper Series 2004-30, Centre for the Study of African Economies, University of Oxford.
  2. Appleton, Simon, 2003. "Regional or National Poverty Lines? The Case of Uganda in the 1990s," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  3. Marcel Fafchamps & Ruth Hill & Aliziki Kaudha, 2004. "The Transmission of International Commodity Prices to Domestic Producers," Development and Comp Systems 0409038, EconWPA.
  4. Dorosh, Paul A. & El-Said, Moataz & Lofgren, Hans, 2003. "Technical Change, Market Incentives And Rural Incomes: A Cge Analysis Of Uganda'S Agriculture," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25846, International Association of Agricultural Economists.
  5. Ritva Reinikka & Paul Collier, 2001. "Uganda's Recovery : The Role of Farms, Firms, and Government," World Bank Publications, The World Bank, number 13850, August.
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Cited by:
  1. Murekezi, Abdoul Karim & Loveridge, Scott, 2009. "Have coffee reforms and coffee supply chains affected farmers' income? The case of coffee growers in Rwanda," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49597, Agricultural and Applied Economics Association.
  2. Stephan Klasen & Jan Priebe & Robert Rudolf, 2013. "Cash crop choice and income dynamics in rural areas: evidence for post-crisis Indonesia," Agricultural Economics, International Association of Agricultural Economists, vol. 44(3), pages 349-364, 05.


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