Estimating the farm level input demand and output supply functions for groundnut enterprises in Eastern Uganda
Diiro, Gracious Malton
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Uganda's Plan for Modernization of Agriculture (PMA) emphasizes increased farm-level profitability and productivity, a strategy being implemented by NARO and NAADS through generation and dissemination of better production technologies to farmers. Groundnut production is one of the priority and important enterprises where new improved varieties and practices have been generated, disserninated and adopted by farmers in Uganda. However, the crop farm yield (0.8Mt/ha) has remained low compared to the potential yield of 2.5Mt/ha. Research has rnainly focused on agronomic and crop improvements ignoring economic analysis of the factors affecting the demand for purchased inputs and output supply functions for groundnuts. This study estimated the input demand and output supply functions for the groundnut enterprise using cross sectional data collected from a sample of 160 farmers in Kurni and Tororo districts. Results show that an average farmer allocated 0.5ha of land and 281 person-day's of labour per ha to groundnuts production. About 96% of the farmers used animal draft power (at a rate of 55hrs per ha). None of the sampled farmers used fertilizers while about 34o applied pesticides (at a rate of l.5litres/ha). Econometric results show hurnan wage rate, price of animalpower, outputprice, price of planting seed and farm size as the critical factors to human labour and animal drafr power demand. Draft power demand was also affected by extension and education. Farm demand for planting seed was determined by price of the seed, larm size and education while pesticides demand was influenced by output price, gender, education and human wage rate. Groundnut quantity supplied was affected by price of animal power, output price, education, extension, pesticides application and farm size. ln conclusion, groundnut output price and prices of inputs, extension services, level of education and farm size are critical factors influencing input demand and output supply of groundnuts. The four inputs (labour, draft power, seed and pesticides) are compliments. Animal draft power, improved seed and agrochemicals are yield augmenting technologies in groundnut production. Thus, farm-level demand for groundnuts production inputs and supply of groundnuts can be irnproved by strengthening the agricultural marketing system through collective marketing and timely market information delivery; revisiting the tractor hire service mechanisms to supplement animal draft power; improving tlie efficiency of extension inlbrmation flow to farmers; upholding the poticy of Universal Primary Education (UPE) and PMA's adult education strategy; scaling out the Integrated Pest Management (IPM) practices.