The Ugandan economy: supply response of agriculture to price and non-price factors (1981-1993)

This study provide estimates of real price elasticity of individual and sub-aggregate agricultural output in Uganda during 1981-1993. Real price, time trend as a proxy for non-price variables, weather and lagged output are included as explanatory variables in the regression analysis. The Nerlovian loglinear specification is used for estimation. It is found that far both individual crops and sub-aggregate production, the supply responses are positive. In general , far individual craps, the long run price elasticities tend to be larger than thane for short run, and are fairly sizable. The impact of non-price factors an aggregate output is positive and substantial. This result shows the significance of non-price variables in raising agricultural output. From the study, it is suggested that policy makers and planners should pay attention to price as well as non price factors. It has been mated that although price policy is necessary, in the absence of other supporting non-price policies, there will not be sufficient motivation to bring about changes in the Uganda's agricultural sector. A package of policy changes may elicit a quite different response from farmers than c price change alone. The dissemination of indicative price based on world market price and domestic cost structures is was found out to be crucial until such a time that competitive markets are created. Prices and marketing margins through private buyers were found to be fluctuating throughout the period. Cash crops are affected more than the food crops.