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The Impact of Coffee Price Changes on Rural Households in Uganda

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

Abstract

Based on household survey data, this paper investigates the impact on coffee and non-coffee households of the pronounced coffee price fluctuations in Uganda during the 1990s. As expected, the price boom of the early 1990s was associated with substantial poverty reduction for coffee farmers. More strikingly, their poverty incidence continued to go down when prices fell again. This may be explained by a combination of factors: first, coffee production increased after 1995, probably as a delayed response to improved price incentives; second, there is evidence of consumption smoothing among specialized coffee farmers; and third, coffee farmers diversified into alternative crops. Non-coffee farmers seem to have benefited from the income generated through the coffee price boom. For the second halve of the 1990s, by contrast, it is impossible to discern any indirect effect of the fall in coffee prices from the data, which does, however, not necessarily indicate that there was none but may as well be due to the fact that other factors dominated the price change.

Suggested Citation

  • Bussolo, Maurizio & Godart, Olivier & Lay, Jann & Thiele, Rainer, 2006. "The Impact of Coffee Price Changes on Rural Households in Uganda," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25345, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae06:25345
    DOI: 10.22004/ag.econ.25345
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    1. repec:bla:devpol:v:21:y:2003:i::p:481-509 is not listed on IDEAS
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    3. Maurizio Bussolo & Olivier Godart & Jann Lay & Rainer Thiele, 2007. "The impact of coffee price changes on rural households in Uganda," Agricultural Economics, International Association of Agricultural Economists, vol. 37(2‐3), pages 293-303, September.
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    6. L. ALAN WINTERS & NEIL McCULLOCH & ANDREW McKAY, 2015. "Trade Liberalization and Poverty: The Evidence So Far," World Scientific Book Chapters, in: Non-Tariff Barriers, Regionalism and Poverty Essays in Applied International Trade Analysis, chapter 14, pages 271-314, World Scientific Publishing Co. Pte. Ltd..
    7. 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, vol. 12(4), pages 598-624, December.
    8. Krivonos, Ekaterina, 2004. "The impact of coffee market reforms on producer prices and price transmission," Policy Research Working Paper Series 3358, The World Bank.
    9. Bussolo, Maurizio & Godart, Olivier & Lay, Jann & Thiele, Rainer, 2006. "The impact of commodity price changes on rural households : the case of coffee in Uganda," Policy Research Working Paper Series 4088, The World Bank.
    10. Ritva Reinikka & Paul Collier, 2001. "Uganda's Recovery : The Role of Farms, Firms, and Government," World Bank Publications - Books, The World Bank Group, number 13850.
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    Cited by:

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    2. Green, Erik & Hillbom, Ellen & Lindgren, Mattias, 2011. "Principal Trends and Debates in African Agricultural Development," MPRA Paper 92547, University Library of Munich, Germany.
    3. Ghoshray, Atanu, 2021. "Are coffee farmers worse off in the long run?," 95th Annual Conference, March 29-30, 2021, Warwick, UK (Hybrid) 311084, Agricultural Economics Society - AES.
    4. 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.
    5. Maurizio Bussolo & Olivier Godart & Jann Lay & Rainer Thiele, 2007. "The impact of coffee price changes on rural households in Uganda," Agricultural Economics, International Association of Agricultural Economists, vol. 37(2‐3), pages 293-303, September.
    6. Golan, Jennifer & Lay, Jann, 2008. "More Coffee, More Cigarettes? Coffee Market Liberalisation, Gender, and Bargaining in Uganda," Conference papers 331806, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    7. Spencer Dorsey, 2020. "The opportunity cost of intrastate violence and the out-of-sample validity of commodity price shocks," The Journal of Defense Modeling and Simulation, , vol. 17(3), pages 309-324, July.
    8. Aksoy , M. Ataman & Isik-Dikmelik, Aylin, 2008. "Are low food prices pro-poor ? net food buyers and sellers in low-income countries," Policy Research Working Paper Series 4642, The World Bank.
    9. Ishengoma, Esther K. & Kappel, Robert, 2008. "Business Constraints and Growth Potential of Micro and Small Manufacturing Enterprises in Uganda," GIGA Working Papers 78, GIGA German Institute of Global and Area Studies.
    10. Llambí, Cecilia & Laens, Silvia & Perera, Marcelo & Ferrando, Mery, 2008. "Assessing the impact of the 2007 Tax Reform on poverty and inequality in Uruguay," Conference papers 331810, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    11. Abdoul Murekezi & Songqing Jin & Scott Loveridge, 2014. "Have coffee producers benefited from the new domestic cherry market? Evidence using panel data from Rwanda," Agricultural Economics, International Association of Agricultural Economists, vol. 45(4), pages 489-500, July.
    12. Lay, Jann & Golan, Jennifer, 2009. "The Impact of Agricultural Market Liberalisation from a Gender Perspective: Evidence from Uganda," Proceedings of the German Development Economics Conference, Frankfurt a.M. 2009 20, Verein für Socialpolitik, Research Committee Development Economics.
    13. Mekasha, Tseday J. & Molla, Kiflu G. & Tarp, Finn & Aikaeli, Jehovaness, 2022. "Commodity price fluctuations and child malnutrition," World Development, Elsevier, vol. 158(C).
    14. Fjelde, Hanne, 2015. "Farming or Fighting? Agricultural Price Shocks and Civil War in Africa," World Development, Elsevier, vol. 67(C), pages 525-534.

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