Assessing the profitability of ground nuts production in Kakoli sub-county Budaka district Budaka

Abstract

he study was carried out to assess the factors affecting profitability of ground nuts production in Kakoli sub-county, Budaka district in Eastern Uganda. The objectives of the study were to estimate the production of ground nuts and to assess the factors affecting allocative efficiency of ground nuts in Kakoli sub-county. A cross sectional survey data set was collected from a random sample of 100 farmers in Budaka district. The study employed a stochastic Frontier Approach (cobbs Douglas function) and the Value of Marginal Product Approach in determining the input elasticities and allocative efficiencies level respectively. Data were collected were collected with the aid of structured questionnaires administered to 100 farmers from the study area. Data were analyzed using descriptive statistics. Results revealed that 14% were females and 86% males, 55% grew local varieties and 45% grew improved varieties,77.8% had no access to credit and 22.2% had access to credit. The marginal input of labor, seeds and herbicides were 5.23, 7.8 and 70.7 while when their elasticities were summed up, we obtained 0.64 which is less than one implying that farmers over allocated resources and obtained decreasing returns to scale. The allocative efficiency for labor was positively influenced by seeds. The study recommended that government provide improved varieties to farmers, establish rural banks to enable farmers access credit, subsidize Agro-chemicals so that farmers access it at cheap prices thus increasing productivity and increase in farmer’s profits.