Is the Price Right? Returns to Input Adoption in Uganda

Ruth Hill, Carolina Mejia-Mantilla and Kathryn Vasilaky ()
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Carolina Mejia-Mantilla: Poverty and Equity Global Practice, World Bank Group
Kathryn Vasilaky: Department of Economics, California Polytechnic State University

No 2105, Working Papers from California Polytechnic State University, Department of Economics

Abstract: We estimate the profitability of fertilizer and hybrid seed use in Uganda, inputs widely promoted to enhance smallholder farmers’ productivity, but that have low rates of adoption. Past studies that evaluate the returns to agronomic inputs generally assume a fixed output price and do not account for the high output price volatility that farmers face. Using unique historical output price data, we show that adoption of fertilizer is more profitable than hybrid seed, and that price volatility alone cannot explain the low levels of adoption. When we consider input quality and poor weather conditions returns can become negative even at median prices. Risk aversion further exacerbates low adoption in some markets.

Keywords: input adoption; price volatility; yields; returns; Uganda (search for similar items in EconPapers)
JEL-codes: D13 Q12 Q16 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2021
New Economics Papers: this item is included in nep-agr and nep-dev
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:cpl:wpaper:2105

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