Linking crop productivity, market participation and technology use among smallholder farmers: Evidence from Uganda

Dablin Mpuuga, Sawuya Nakijoba, Ambrose Ogwang, Duncan Boughton, & Rui Benfica

In this paper, we establish a link between crop productivity, crop market participation and agricultural technology use among smallholder farmers. We utilise the latest four waves of the Uganda National Panel Survey – 2013/2014, 2015/2016, 2018/2019, and 2019/2020. First, we test for the complementarity of agricultural technology use among smallholder farmers, but we find no evidence for the combined effect of organic and inorganic fertilisers, as well as pesticides and organic fertilisers, on crop yields, which depicts a lack of complementarity. However, we find a strong individual effect of organic fertilisers on cassava, beans and coffee yields. Second, we use a two-step factor analysis to construct four technology sub-indexes for improved seeds, pesticides, organic and inorganic fertilisers in the first step, and the overall agricultural technology index in the second step. The results reaffirm the positive effect of agricultural technology use on cassava and coffee yields. Third, when we measure crop productivity as farm productivity, we find that a unit increase in inorganic fertilisers increases farm productivity by 69%. However, we do not see this strong effect of inorganic fertilisers on our partial measure of crop productivity – crop yields. Lastly, we show that crop yields are the most critical for market participation.