Uganda Crop Trader Characteristics, and their Marketing Constraints

Abstract

The broad objective of this study is to understand the characteristics of agricultural commodity traders and the marketing constraints they face in Uganda. A survey covering 544 agricultural output traders in Uganda was conducted in 2000 to 2002. Descriptive statistics and multinomial logit econometric model were used to analyze the characteristics of traders and their marketing constraints. Most traders started their businesses using own funds, implying a serious credit constraint. The credit constraint appears to be the most important factor that has limited entry of potential local traders into the lucrative coffee and cotton export sector. The same constraint appears to have contributed to the exit of many local coffee exporters who joined the sector after coffee marketing liberalization in the early 1990?s. There is also lack of collective action through trader associations among medium and small scale commodity traders, thus, the need for local traders to form associations and cooperatives for marketing their crops in the international market. Quality seems to be the most common problem in output trading, partly because farmers are not remunerated for quality. Half of the exporters, main town and primary fixed traders use intermediaries, implying the need to recognize the importance of intermediaries and license and facilitate their brokerage services. Education, commodity profit, access to credit, level of working capital, gender of principal trader, country of origin, and region where trading business is located, are important factors that determine the decision on type of crop to market.




Key words: Coffee, cotton, maize, cassava, credit constraint, commodity traders, marketing, crop quality


Eastern Africa Journal of Rural Development (2002) 18, 23-39