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The impact of coffee price changes on rural households in Uganda

  • 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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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. Ritva Reinikka & Paul Collier, 2001. "Uganda's Recovery : The Role of Farms, Firms, and Government," World Bank Publications, The World Bank, number 13850, March.
  2. Simon Appleton, 2003. "Regional or National Poverty Lines? The Case of Uganda in the 1990s," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 12(4), pages 598-624, December.
  3. Marcel Fafchamps & Ruth Vargas Hill, 2005. "Selling at the Farmgate or Traveling to Market," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(3), pages 717-734.
  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. Marcel Fafchamps & Ruth Vargas Hill & Aliziki Kaudha & Robert Waggwa Nsibirwa, 2003. "The transmission of international commodity prices to domestic producers," CSAE Working Paper Series 2003-14, Centre for the Study of African Economies, University of Oxford.
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