Leading the way – foreign direct investment and dairy value chain upgrading in Uganda

Bjorn Van Campenhout, Bart Minten and Johan Swinnen

Agricultural Economics, 2021, vol. 52, issue 4, 607-631

Abstract: Driven by increased demand from both local and export markets and facilitated by far‐reaching liberalization and privatization policies, the dairy sub‐sector in Uganda has undergone significant changes in the last decade. With a comparative advantage in milk production, the southwest of Uganda has started to attract considerable Foreign Direct Investment (FDI) in processing capacity, mainly targeting the export market. As a result, processing capacity increased five‐fold and dairy became Uganda's third most important export product, coming from negligible amounts a decade earlier. In this study, we use data collected at different nodes within the value chain to identify some of the key innovations in these value chains. This is done by comparing the area that received the bulk of FDI to a similar area that did not. Furthermore, we also provide an econometric analysis that focuses on the integration of value chain actors into modern value chains more broadly defined. We find that dairy value chains are transforming rapidly, but innovations are more pronounced in areas that received the bulk of FDI. Our analysis further underscores the importance of milk collection centers, which often take the form of farmer cooperatives, in providing many of the support services that enable other actors in the value chain to produce sufficient milk, and maintain milk sanitation levels necessary for a modern export sector to emerge.

Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://doi.org/10.1111/agec.12638

Related works:
Working Paper: Leading the Way - Foreign Direct Investment and Dairy Value Chain Upgrading in Uganda (2021)
Working Paper: Leading the Way - Foreign Direct Investment and Dairy Value Chain Upgrading in Uganda (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:agecon:v:52:y:2021:i:4:p:607-631

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0169-5150

Access Statistics for this article

Agricultural Economics is currently edited by W.A. Masters and G.E. Shively

More articles in Agricultural Economics from International Association of Agricultural Economists Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().