Adoption and Impact of Improved Groundnut Varieties on Rural Poverty: Evidence from Rural Uganda

This paper evaluates the ex-post impact of adopting improved groundnut varieties on crop income and rural poverty in rural Uganda. The study utilizes cross-sectional farm household data collected in 2006 in seven districts of Uganda. We estimated the average adoption premium using propensity score matching (PSM), poverty dominance analysis tests, and a linear regression model to check robustness of results. Poverty dominance analysis tests and linear regression estimates are based on matched observations of adopters and non-adopters obtained from the PSM. This helped us estimate the true welfare effect of technology adoption by controlling for the role of selection problem on production and adoption decisions. Furthermore, we checked covariate balancing with a standardized bias measure and sensitivity of the estimated adoption effect to unobserved selection bias, using the Rosenbaum bounds procedure. The paper computes income-based poverty measures and investigates their sensitivity to the use of different poverty lines. We found that adoption of improved groundnut technologies has a significant positive impact on crop income and poverty reduction. These results are not sensitive to unobserved selection bias; therefore, we can be confident that the estimated adoption effect indicates a pure effect of improved groundnut technology adoption.groundnut technology adoption, crop income, poverty alleviation, propensity score matching, switching regression, stochastic dominance, Rosenbaum bounds, Uganda

Rural institutions and producer organizations in imperfect markets: experiences from producer marketing groups in semi-arid eastern Kenya

"Many countries in sub-Saharan Africa have liberalized markets to improve efficiency and enhance market linkages for smallholder farmers. The expected positive response by the private sector in areas with limited market infrastructure has however been disappointing. The functioning of markets is constrained by high transaction costs and coordination problems along the production-to-consumption value chain. New kinds of institutional arrangements are needed to reduce these costs and fill the vacuum left when governments withdrew from markets in the era of structural adjustments. One of these institutional innovations has been the strengthening of producer organizations and formation of collective marketing groups as instruments to remedy pervasive market failures in rural economies. The analysis presented here with a case study from eastern Kenya has shown that while collective action – embodied in Producer Marketing Groups (PMGs) – is feasible and useful, external shocks and structural constraints that limit the volume of trade and access to capital and information require investments in complementary institutions and coordination mechanisms to exploit scale economies. The effectiveness of PMGs was determined by the level of collective action in the form of increased participatory decision making, member contributions and initial start-up capital. Failure to pay on delivery, resulting from lack of capital credit, is a major constraint that stifles PMG competitiveness relative to other buyers. These findings call for interventions that improve governance and participation; mechanisms for improving access to operating capital; and effective strategies for risk management and enhancing the business skills of the PMGs." Author's AbstractMarket imperfections, Transaction costs, Farmer organizations, Institutions, Collective action, Semi-arid tropics, Kenya, East Africa,

Role of Social Capital on Uptake of Sustainable Agricultural Intensification Practices’ Combinations

Smallholder farmers in sub-Saharan Africa are faced with many challenges in the production of maize and legumes. Some of the challenges include soil mining, drought, soil erosion, input acquisition among others. These challenges cannot be alleviated with the adoption of a single agricultural practice but a bundle of combination. There was need, therefore, to evaluate if social capital among other factors influences adoption of the different combination of the six Sustainable Agricultural Intensification Practices among smallholder maize-legume systems in Kenya. The study used secondary data from Adoption Pathway project panel dataset collected from Bungoma, Siaya, Meru, Tharaka Nithi and Embu counties, in three waves:  covering 613 households in the baseline, 535 in the midline and 495 in the end line was used in the analysis. Eighteen possible combinations adopted by smallholder farmers, a Principal Component Analysis was used to reduces data dimensionality, such that Seven possible clusters were formed that were homogeneous within. An index of the different combinations in the cluster was then formed for each household. Using STATA software, a Seemingly Unrelated Regression model was used in the analysis of the seven equations against a set of dependent variables, among them social capital. The findings of the study showered that social capital is not significant in explaining adoption of different combinations of SAIPs that a household adopted except for cognitive social capital and participation level in group institutions where the household was a member. Other factors that influenced adoption of combination of SAIPs included age of the household head, received information about SAIP and input markets, amount of money that a household got as income and that which they saved. Additionally, the spatial distance of the farming plot measured as the number of walking minutes from the household homestead and the number of years one has been living in the village practicing maize-legume production also significantly influenced the combinations of the SAIPs that a household adopted. Policy interventions should encourage and promote better access to information and encourage participation in group institutions. Keywords: Principal Component Analysis, Clusters, Seemingly Unrelated Regressio

Building sorghum seed sector along the grain market in Tanzania: Areas for policy support

In Tanzania, sorghum is the 3rd most grown cereal with approximately 500,000 tons produced per year (FAOSTAT, 2018). It is grown in semi-arid regions of Dodoma, Singida, Mara, Shinyanga, Mwanza, and Tabora regions. Farmers primarily produce sorghum for consumption (83%) rather than commercial purpose (17%). It is mainly used as human food, animal feeds, alcoholic beverages, and biofuels. In the past years, there has been an increase in sorghum production from 676,772 tons in 2015 to 750,000 tons in 2020 (FAOSTAT, 2022). Recently, there is an increase in demand for sorghum since many people are increasingly getting aware of the health benefits thatcome with the consumption of sorghum like prevention of cancer, reducing tumor incidence, and lowering blood pressure (Saleh et al, 2013); and increase in sorghum demand among breweries like Serengeti Breweries Limited (SBL) (American sorghum, 2016). White sorghum is highly preferred in and outside the country because of its use, color and low tannin; and red sorghum is highly demanded in Lake Zone and Northern Highland of Tanzania and exported to Burundi and Rwanda. Tanzania mostly exports sorghum to Uganda, Rwanda, Kenya, Burundi, and United Arab Emirates (UAE). Sorghum grain in Tanzania hardly competes in both local and international markets because of the low-quality grain produced due to the use of landraces, traditional postharvest method, limited extension services, and lack of information in good agronomic practices. The presence of low-quality grain gives grain off-takers hard time to compete in the market and this results in low grain prices. Sorghum grain sector faces a number of challenges including unreliable market (close to 36%), low quality grain (about 25%), high tariff (around 11%), lack of storage facilities and low price (around 5 to 6%) (Table 1). The sorghum value chain in Tanzania can be strengthened if the seed sector is responsive

Mapping out market drivers of improved variety seed use: the case of sorghum in Tanzania

It is understood that the grain market pulls the seed market. The problem of low quality prompted failure of traders and processors to purchase most of the farmers' grain to subsequently drive the use of improved variety seed. The aim of this study is to identify drivers that persuade farmers to use improved variety seeds for grain production. It also assesses factors affecting market participation among small-scale farmers. Descriptive analysis, Binary Logistic model, Probit model and gross margin analysis was conducted from random selected sample of 212 individual farmers, 63 grain off-takers, 3 extension officers and 7 seeds producers through structured interviews. In additional, 80 farmers were interviewed through 10 focus group discussion. The results showed that taste, preferences and price difference between grain and seed were significant and positive drivers that influenced the decision of farmers to use improved varieties at 47% and 0.007%, respectively. Factors such as group membership and farm size were significantly positive affecting farmer's market participation while age was negatively significant affecting farmer's market participation. Gross margin was computed to compare the profit margin between users and non-users of improved variety seeds, where users had high profit margin (530 979.89Tsh/Ha) compared to non-users (472 885.94Tsh/Ha), because non-users incurred high seed cost (54 504.84Tsh/15kg) compared to users of improved variety seeds (39 329.94Tsh/kg). Also, users obtained high grain revenue compared to non-user at 1 353 268.37Tsh and 848 249.11Tsh, respectively. Efforts should be made by value chain actors and other agricultural actors to support farmers based on market demand so they could benefit from high grain quality, quantity and promising grain market

Delineating investment opportunities for stakeholders in sorghum seed systems: a logit model perspective

Seed systems are considered as a vehicle through which the sustainable agricultural intensification can be achieved. However, most sub-Saharan African countries have been ineffective to provide sufficient incentives for stakeholders to consistently invest in the seed systems specifically for crops like sorghum. This study was therefore conducted to uncover investment opportunities for stakeholders in the sorghum seed systems to attain an impact-oriented seed production and delivery systems

Designing self-sustaining early generation seed supply systems: The must-dos

Shortages in the supply of quality early generation seed (EGS) of new and improved varieties, particularly of dryland cereals and legumes is a major challenge because of the business models.This triggers the following questions: what EGS business models would sustainably avail quality parent seed? To investigate this, we documented 16 EGS interventions. We found that pre-securing seed market ahead of production played important role in the successful seed business. Taking different forms (e.g., pre-orders, demand forecasting, pre-aggregation of demand, joint planning,contractual agreement), it brings confidence to EGS producers to continuously invest in the business and make it profitable. For sustainable EGS production and supply in sub-Saharan Africa, we advocate for market assurance in advance. Two guiding principles are also suggested and four recommendations formulated

Determinants of Market Participation Regimes among Smallholder Maize Producers in Kenya

More studies have been conducted on determinants of smallholder participation in markets as sellers, with scant attention to why farmers participate in markets as either net sellers, autarkic or net buyers. Employing a random effect ordered probit model, this paper examines factors determining households’ participation in maize markets as either net sellers, autarkic or net buyers. Contrary to government intentions for producer price supports, this study showed that households that faced high producer selling prices of maize were likely to be net buyers. However, household membership to agricultural production groups increased the likelihood of farmers being net sellers. Similarly, adoption of inorganic fertilizer and improved maize varieties were positively associated with being net sellers. Therefore, policies supporting high producer selling prices should be discouraged and instead encourage those that ease smallholder access to fertilizer and improved maize seed

Rural institutions and producer organizations in imperfect markets: experiences from producer marketing groups in semi-arid eastern Kenya

Many countries in sub-Saharan Africa have liberalized markets to improve efficiency and enhance market linkages for smallholder farmers. The expected positive response by the private sector in areas with limited market infrastructure has however been disappointing. The functioning of markets is constrained by high transaction costs and coordination problems along the production-to-consumption value chain. New kinds of institutional arrangements are needed to reduce these costs and fill the vacuum left when governments withdrew from markets in the era of structural adjustments. One of these institutional innovations has been the strengthening of producer organizations and formation of collective marketing groups as instruments to remedy pervasive market failures in rural economies. The analysis presented here with a case study from eastern Kenya has shown that while collective action – embodied in Producer Marketing Groups (PMGs) – is feasible and useful, external shocks and structural constraints that limit the volume of trade and access to capital and information require investments in complementary institutions and coordination mechanisms to exploit scale economies. The effectiveness of PMGs was determined by the level of collective action in the form of increased participatory decision making, member contributions and initial start-up capital. Failure to pay on delivery, resulting from lack of capital credit, is a major constraint that stifles PMG competitiveness relative to other buyers. These findings call for interventions that improve governance and participation; mechanisms for improving access to operating capital; and effective strategies for risk management and enhancing the business skills of the PMGs