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Alternative growth scenarios for Ugandan coffee to 2020:

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  • You, Liangzhi
  • Bolwig, Simon

Abstract

Coffee is the most important export crop in Uganda and an important source of income among smallholder farmers in large parts of the country. The Robusta type dominates coffee production and Ugandan Robusta is demanded by roasters as a component in certain blends due to its special taste qualities. However, a combination of events outside and within Uganda, especially the collapse of world coffee prices in the late 1990s, are eroding farmer incomes and export revenues and threaten the long-term viability of the industry. In this context, the paper first investigates the challenges faced by the Ugandan coffee industry, namely the decline in the world coffee market, changes in procurement strategies among coffee importers, the rapidly expanding market for high quality and specialty coffees, and the spread of the coffee wilt disease and other farm-level productivity constraints. This leads us to examine possible development strategies for Ugandan coffee production: area expansion, quality improvement, and productivity increase. Using IFPRI's Dynamic Research Evaluation for Management (DREAM) model, different scenarios for each of these strategies are evaluated to show their potential impacts on Ugandan export prices, export revenues, and producer benefits. The simulation results show that Uganda would benefit relatively more by enhancing farm productivity and improving coffee quality. The economic benefits of increasing production through area expansion, on the other hand, would be significantly eroded by the negative effects on export prices, especially if other countries followed suit and accelerated their own growth in coffee production. These analyses focus on the potential benefits of alternate changes in Ugandan coffee production, while devoting less attention to how and at what costs such changes may be effected. Finally, it is suggested that because the world coffee market is so important to the Ugandan economy, and being the third biggest Robusta producer in the world, Uganda has a high stake and important role to play in international coordination efforts to raise and stabilize world coffee prices.

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Bibliographic Info

Paper provided by International Food Policy Research Institute (IFPRI) in its series EPTD discussion papers with number 98.

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Date of creation: 2003
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Handle: RePEc:fpr:eptddp:98

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Keywords: Coffee industry Uganda; Commodity markets; exports; production possibilities; Prices;

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  1. Brennan, John P. & Godyn, Dirk L. & Johnston, Brian G., 1989. "An Economic Framework for Evaluating New Wheat Varieties," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 57, December.
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Cited by:
  1. Gruère, Guillaume P., 2006. "An analysis of trade related international regulations of genetically modified food and their effects on developing countries:," EPTD discussion papers 147, International Food Policy Research Institute (IFPRI).
  2. Paul J. Block & Kenneth Strzepek & Mark W. Rosegrant & Xinshen Diao, 2008. "Impacts of considering climate variability on investment decisions in Ethiopia," Agricultural Economics, International Association of Agricultural Economists, vol. 39(2), pages 171-181, 09.
  3. Falck Zepeda, José & Barreto-Triana, Nancy & Baquero-Haeberlin, Irma & Espitia-Malagón, Eduardo & Fierro-Guzmán, Humberto & López, Nancy, 2006. "An exploration of the potential benefits of integrated pest management systems and the use of insect resistant potatoes to control the Guatemalan Tuber Moth (Tecia solanivora Povolny) in Ventaquemada,," EPTD discussion papers 152, International Food Policy Research Institute (IFPRI).
  4. Di Falco, Salvatore & Chavas, Jean-Paul & Smale, Melinda, 2006. "Farmer management of production risk on degraded lands: the role of wheat genetic diversity in Tigray Region, Ethiopia," EPTD discussion papers 153, International Food Policy Research Institute (IFPRI).
  5. Smale, Melinda & Zambrano, Patricia & Falck-Zepeda, José & Gruère, Guillaume, 2006. "Parables: applied economics literature about the impact of genetically engineered crop varieties in developing economies," EPTD discussion papers 158, International Food Policy Research Institute (IFPRI).
  6. Gruère, Guillaume & Giuliani, Alessandra & Smale, Melinda, 2006. "Marketing underutilized plant species for the benefit of the poor: a conceptual framework," EPTD discussion papers 154, International Food Policy Research Institute (IFPRI).
  7. Linacre, Nicholas & Falck-Zepeda, José & Komen, John & MacLaren, Donald, 2006. "Risk assessment and management of genetically modified organisms under Australia's Gene Technology Act:," EPTD discussion papers 157, International Food Policy Research Institute (IFPRI).

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