Effect of Rising Food Prices on Household Welfare: A Case Study of Mukono District

Abstract

Given the countrywide increase in food prices, the core question of this research is, ‗what was the effect of the rising food prices on household welfare in mukono‘? Taking an empirical approach and using micro-economic methods, four welfare outcomes are assessed: consumption, equality of income distribution, poverty and nutrition. The 2006 and 2010 cross-section household surveys - Living Conditions Monitoring Surveys (LCMS) - are primarily used to answer the question. Therefor this study based on sample of 50 respondents that were interviewed. The variables considered were sex of respondents, age of respondents, education level,and effect of increase in food prices.The main objective of the study was to effect of rising food prices on household welfare a case study of mukono district Uganda. Hence many hypotheses were tested and these included; The majority of respondents that were interviewed were males (60%), had attained primary level of education (70%). Majority were farmers (62%) followed by those that were employed (22%). Most of them were from the urban areas with 68 percent, Most of the respondents had been affected by increase in food prices (60%), and majority‘s food intake reduced as a result of increase in food prices (60%) and were also having three meals a day (44%) At the second level of analysis, chi square tests were used to establish the relationship between dependent and independent variables. A highly significant relationship was found to exist between increase in food prices and sex of respondents, residence, occupation and number of meals that one had after increase in food prices. The recommendations made were as follows; the government of Uganda should invest more in regular and comprehensive household surveys to enhance evidence based policy making and more importantly ensure timely targeted responses when households face covariate shocks. Adding a separate section on community level prices in the survey questionnaire would increase the understanding of prices at a more localized level Government should set price regulation regarding food staffs in order to reduce price fluctuations of food staff. Controlling food prices enable the whole population have access to affordable and food prices.