Transaction Cost Analysis for Selected Crops with Export Potential in Uganda

AT appropriate technology CARE Cooperative for Relief Everywhere, NGO CTA Technical Centre for Agricultural and Rural Cooperation , ACP-EU CDO Cotton Development Authority CIF cost, insurance and freight CMB Coffee Marketing Board COMPETE This is a bilateral project funded by USAID—Uganda to support increased competitiveness of specifi c commodities, particular those export-based. Implemented by Carana Associates. Note: Cess: a kind of rate or tax. Now the term used for specifi c types of export taxation that are used to fund commodity promotion/regulatory boards. The Transaction Cost Analysis study was commissioned by the Ministry of Finance, Planning and Economic Development (MoFPED) on behalf of the Marketing and Agroprocessing Subcommittee of the Secretariat for the Plan for the Modernisation of Agriculture (PMA). It was carried out between 14 January 2002 and 11 March 2002 by a consultancy team from the Natural Resources Institute (NRI), UK and IITA's Eastern and Southern Africa Center (IITA–ESARC), Kampala. The study focused on the analysis of marketing and transaction costs 1 along the marketing chain, from the farm gate to tertiary markets (domestic and export), of the following six key strategic commodities/product groups identifi ed by the PMA: cassava, coffee, cotton, dairy products, fi sh, and maize. The key objective of the study was to recommend implementation plans that would overcome constraints to marketing and processing effi ciency and improve farm-gate prices to smallholders. The improvement of prices received by poor farmers is a specifi c aim related to the broader strategy of the PMA that emerged from the Poverty Eradication Action Plan (PEAP), encouraging the growth of commercial farming amongst the rural poor and halting a shift to subsistence agriculture. Our terms of reference covered the baseline assessment of marketing, processing, and transaction costs, tactics, and strategies for improving effi ciency, the assessment of alternative approaches to reducing costs, the recommendation of an implementation plan to the PMA, and further technical assistance studies. Following a review of relevant literature and inception activities in Kampala, we carried out fi eld visits in key regions of the country relevant to the study's six subject commodities/ product groups. Our analysis, fi ndings, and recommendations are the result of fi eldwork and consultations with key stakeholders in the public and private sectors. Numerous interviews were conducted with representatives of government, public sector monitoring and regulatory bodies, agricultural research institutions, private sector businesses, farmers' groups, and individual small-scale farmers. The fi …