Analyzing profitability of chilli production among smallholder farmers in Nakaseke district, Uganda

Abstract

Chilli a non-traditional export crop in Uganda is becoming an important cash crop to the farmers and yet its potential remains unexploited. This study was conducted to assess the profitability of chilli among the farmers in Nakaseke district. A cross-sectional survey was used for data collection. The data was analyzed using; descriptive statistics for characterization of the farmers, gross margin analysis to obtain profitability and multiple regression to analyze factors affecting profitability. A total of 95 respondents were interviewed from 4 sub-counties in the district. Majority farmers (38%) lived in Kapeeka sub-county, followed by Wakyato (28.4%), Nakaseke (25.3%) and the least in Kinyogogoga (8.4%). The largest proportion of chilli variety grown was Birds eye (57.89%), followed by Cayenne (23.16%), Habanero (13.69%) and the least cultivated was Scotch Bonnet (5.26%). Chilli is produced on mean are of 1.2 acres, dried mainly by sun and sold dried or fresh. Mean costs (UGX) involved in chilli production were Seed (324355), Labour (271776), Rent (118158), Fertilizer (304642), Pesticide (190401). Mean profitability parameters obtained were; Productivity of 359.37 Kg/Acre, Total Revenue of 4,088,032, Gross Margin 3,578,699 and rate of return on investment of 7.9 making it an enterprise worth investing in. factors that affected profitability positively were age, family size, experience in farming, chilli price, owning land, labour cost, and using certified seed. Those factors that negatively affected profitability were costs of seed and pesticides. Challenges that were faced in chilli production were; climate change (prolonged drought, unpredicted seasons), low prices of chilli, pests and diseases, lack of processing facilities and expensive credit