Analysis of price incentives for milk in Uganda for the time period 2014-2022

Abstract

The overall objective of the study of the research study was to measure, analyze and interpret price incentives for milk in Uganda for the time period 2014-2022. The research found that there is a positive trend of the price incentives in Uganda for the period 2014-2022 hence showing added value of the milk produced domestically. The research study presents different literature about the consumption of milk by different sectors of the population in Uganda and the steps taken by the government to increase on the consumption level per person. The literature shows how the different types of milk products exported in Uganda and their different quantities and the comparison between earnings from milk exports and imports of Uganda at the international market. It also shows the different government interventions to promote local milk processing factories through the different policy and key measures set by the government in the NDP II AND NDP III planning framework. Descriptive analysis was conducted to determine the mean, median, model and skewness of the domestic prices, F.O.B prices and the price incentives to describe the characteristics of the data for the period of 2017-2022. The study found that there is a positive trend in the milk price incentives for the period 2014-2022. A regression model was further used in the analysis and it was found out there are long run relationships between domestic milk prices, F.O.B prices and milk price incentives for the period of 2017-2022. The research further found there is homoskedasticity and no auto correlation among the variables used that is domestic prices, F.O.B prices and milk price incentives and the model used was stable and a good fit. Lastly, the research study proposed that the government should provide subsidies to the formal milk sector and further formalize the informal sector through licenses in order to prevent low domestic milk prices and low quality milk products. The government should also higher import duties to milk imports in order to promote production of domestic products and further improve the Balance of Payments. The milk processing factories should also make information on their milk prices widely available in order to promote research.