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Is the Price Right? Returns to Input Adoption in Uganda

Author

Listed:
  • Ruth Hill

    (Poverty and Equity Global Practice, World Bank Group)

  • Carolina Mejia-Mantilla

    (Poverty and Equity Global Practice, World Bank Group)

  • Kathryn Vasilaky

    (Department of Economics, California Polytechnic State University)

Abstract

We estimate the profitability of fertilizer and hybrid seed use in Uganda, inputs widely promoted to enhance smallholder farmers’ productivity, but that have low rates of adoption. Past studies that evaluate the returns to agronomic inputs generally assume a fixed output price and do not account for the high output price volatility that farmers face. Using unique historical output price data, we show that adoption of fertilizer is more profitable than hybrid seed, and that price volatility alone cannot explain the low levels of adoption. When we consider input quality and poor weather conditions returns can become negative even at median prices. Risk aversion further exacerbates low adoption in some markets.

Suggested Citation

  • Ruth Hill & Carolina Mejia-Mantilla & Kathryn Vasilaky, 2021. "Is the Price Right? Returns to Input Adoption in Uganda," Working Papers 2105, California Polytechnic State University, Department of Economics.
    • Handle: RePEc:cpl:wpaper:2105
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    References listed on IDEAS

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    1. Emmanuel, Bukuwa Nambale, 2022. "The determinants of participation in savings groups and the impact on input investment among smallholder farmers in Sironko district, Uganda," Research Theses 334746, Collaborative Masters Program in Agricultural and Applied Economics.

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    More about this item

    Keywords

    input adoption; price volatility; yields; returns; Uganda;
    All these keywords.

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation

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