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Domestic versus export-led agricultural transformation: evidence from Uganda's dairy value chain

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  • Bjorn Van Campenhout
  • Bart Minten
  • Jo Swinnen

Abstract

Driven by increased demand from both local and export markets and fa- cilitated by far-reaching liberalization and privatization policies, the dairy sub-sector in Uganda has undergone significant changes in the last decade. With a comparative advantage in milk production, the southwest of Uganda has started to attract considerable Foreign Direct Investment(FDI) in processing capacity, mainly targeting the export market. As a result, processing capacity increased five-fold and dairy became Uganda’s third most important export product, coming from negligible amounts a decade earlier. In this study, we use observational data collected at different nodes within the value chain to compare the structure of the chain and the roles and economic activities of different actors between export-led value chains and value chains that cater for the local market. Doing so allows us to identify the technological and institutional innovations that both result from the emergence of export-led dairy value chains and at the same time drive further upgrading. Our analysis underscores the importance of milk collection centers, which often take the form of farmer cooperatives, in providing many of the support services that enable other actors in the value chain to produce sufficient milk, and maintain milk sanitation levels necessary for an export sector to emerge.

Suggested Citation

  • Bjorn Van Campenhout & Bart Minten & Jo Swinnen, 2019. "Domestic versus export-led agricultural transformation: evidence from Uganda's dairy value chain," Working Papers of LICOS - Centre for Institutions and Economic Performance 649037, KU Leuven, Faculty of Economics and Business (FEB), LICOS - Centre for Institutions and Economic Performance.
    • Handle: RePEc:ete:licosp:649037
    Note: paper number 416/2019
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    Cited by:

    1. Liz Ignowski & Bart Minten & Johan Swinnen & Bjorn Van Campenhout & Senne Vandevelde, 2021. "Trade, Value Chain Technology and Prices: Evidence from Dairy in East Africa," LICOS Discussion Papers 42221, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    2. Saule Burkitbayeva & Emma Janssen & Johan Swinnen, 2020. "Technology Adoption, Vertical Coordination in Value Chains, and FDI in Developing Countries: Panel Evidence from the Dairy Sector in India (Punjab)," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 57(2), pages 433-479, September.
    3. Minten, Bart & Tamru, Seneshaw & Reardon, Thomas, 2021. "Post-harvest losses in rural-urban value chains: Evidence from Ethiopia," Food Policy, Elsevier, vol. 98(C).
    4. van der Lee, Jan & Oosting, Simon & Klerkx, Laurens & Opinya, Felix & Bebe, Bockline Omedo, 2020. "Effects of proximity to markets on dairy farming intensity and market participation in Kenya and Ethiopia," Agricultural Systems, Elsevier, vol. 184(C).

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