Determinants and Disparities in Profitability along the Potato Value Chain in South-Western Uganda
Abstract
Potato farming, while meeting the demands of new food consumption patterns emanating from Uganda’s urbanization and dietary diversification due to globalization, has potential to provide a steady and reliable stream of income to its value chain actors. However, challenges and disparities such as unequal distribution of profits exist among the various value chain actors (VCAs) and these include seed multipliers, producers, aggregators, traders, and processors. The study aims at assessing determinants of profitability along the PVC in South- Western (SW) Uganda, by examining factors that influence revenues, operational costs and profits. A cross-sectional research design was adopted to collect data from a sample population of 375 respondents from the districts of Kabale, Kisoro, Rubanda and Rukiga using a semi-structured questionnaire. Using the International Business Machine (IBM) Statistical Package for Social Sciences (SPSS), primary data was analysed to determine descriptive statistics. In addition, the Logistic Regression Model (LRM) was used to determine the factors associated with PVC actors’ profitability. Study findings show that PVC actors’ revenues, operational costs and profit varied along the value chain with processors, aggregators and traders reporting the highest profits in relation to their operational costs while farmers reported the lowest. Notably, results indicated that sales turnover, lack of access to new knowledge, and failure to realise effective collaboration significantly influenced profitability along the chain. Thus, it is concluded that farmers do not benefit as much as the other actors in the PVC due to factors of power imbalances, market structures and, knowledge access. It is, therefore, recommended that the government of Uganda should formulate strategies to increase producers’ profitability. Such as the introduction and strengthening of farmers’ cooperatives, undertaking focused capacity-build
Keywords
– Potato Value Chain
Inequalities
Profit Margins
South-Western Uganda
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