AGRICULTURAL PRODUCTION AND ECONOMIC WELFARE IN UGANDA, A CASE STUDY OF KYAZANGA SUB COUNTY, LWENGO DISTRICT.

KAYESU DOREEN BEC/45225/ 143/ DU

A RESEARCH REPORT SUBMITTED TO THE DEAPRTMENT OF ECONOMICS AND APPLIED STATISTICS IN PARTIAL FULFILLMENT FOR THE REQUIREMENTS OF THE AWARD OF BACHELOR OF ARTS IN ECONOMICS OF KAMPALA INTERANTIONAL UNIVERSITY

JUNE, 2017 DECLARATION I, KAYESU DOREEN declare that, this research report is my own work and has never been produced by anybody else for any award in any institution and that material which is not mine has been fully acknowledged.

Signature______Date~J4th1~/~ ~

KAYESU DOREEN

BEC/45225/ 143/ DU APPROVAL This is to satisfy that this research has been done under my supervision and submitted for examination with my approval.

Signature ~ ~ Date O~ Q_O1 ~(

MR. MUHEREZA FRANKLIN

Supervisor DEDICATION I dedicate this work to my parents Mr. and Mrs. Ssakyindi Peter for his entire patience and love he accorded to me throughout my entire academics.

III ACKNOWLEDGEMENT I would like to thank the Almighty God, for providing me with his grace and opportunity to finish this academic study. I would also like to extend my sincere gratitude to all those who have contributed towards the successful completion of this research report.

I would also like to extend my sincere appreciation to my parents Mr. Ssakyindi Peter and Mrs. Ssakyindi Ruth for their commitment, financial support and guidance, they have been willingly offered to me, through my academics because without them, it would not be a success.

My special thanks goes to my Supervisor Mr. Muhereza Franklin for the time and patience taken to supervise this research report and for his valuable, intellectual and tireless guidance may the almighty God I serve, bless him in his enter life.

I owe much gratitude to all my friends especially; Ezra, Viola, and my brother Stephen, Sam, Grace,paul,yosa m,David,Winnie,Harriet,Saul,oliver,Nathan,Shema,Annet,Fred and the entire Economics and management and staff at Kampala International University

MAY GOD BLESS YOU ALL

iv TABLE OF CONTENTS D ECI~ARA1°ION

APPRO~1’AL

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ACKNOl~AILEDGEMENT 000000U0000000000000000000D0000008U0000000U00000000UUU000000UU00000UOUU0000000005000000 fl~I

C IIIAPTER ONE

I NTRODLJC°TION Duo noon 0000000 ODDS 00000 U U 0 Don 000 U DUO 000000 USD00008 U U 000000000000000 US U 000000 U U U 0000000000 U 0000 CD 01,

1000 Introduction 1

101 Back ground to the Study ~00~•ooo000O0•o000nOO00oonno000D00n00OOO0UOoooO00U000ooU00OO0DDOO0O0UoOOU0D.00UU00OO 1

1.2 Problem Statement 00 D00U00U00D.0U00..~ 4 1~3 Objectives of the Study0..0•00000..0•.0000.00•000000.00000000000000000~00000000000000000000000000000000000000005

1.3.1 General Objective! Purpose of the study 000O~Un0nO0O00OOnOO0OOUoDD0O000U00000O000D000Oo000OU.0OOO0.. 5 1~3.2 Specific 5 1.3.3 Research Questions ~

1.4 Scope of the study 00O000000~n0000000•0O0n00UO0O0OU0O00O00O0O0on0n0O0U00000OOOO0Dn000O0000000..00.O00.O.Uoo.OOOD. 5

1.4.1 Content Scope ~ 5

1.4.2 Geographical Scope ooo..ooooooo.ooo...o.ooo...... o.oo.o..o.6 1.4~3 Time Scope 6 1.5. Significance of the Study 6 1.6 Operational Definitions 7

CHAPTER 1~AIO

LITERATUR REVIEW 0000000000D0000000U00005flfl00000fl0000U000000UDUOUOU0UUOUOUU00000UOUO0UOUD5005D0OUO9 2.0 Introduction g 2.1 Related Studies g

V 2.2 Theoretical Reviews .10 2.3 Conceptual framework 18

C ~1AP1ER TIiREE

RESEARCh ME~T’C1ODOL.OG’Y,,,,,..,,,.,,,,.,.,,,,,,,,..,,,..20 3.0. Introduction 20 3.1 Research Design 20 3.2 Study Population 20 3.3 Study Sample 20 3.4 Data Collection methods 21 3.5 Sampling Strategy/technique 21 3.6 Data types and sources 22

cglAplER

DATA PRESENTATION, ANALYSIS AND INTERPRETATION,,,,,,,,,,,.,,,,,,,,,,,,,,,,,23 4.0 Introduction 23 4.1 Response Rate 23 4.2 Demographic characteristics of the respondents 23

C FIAPTER.. FIVE ~

DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS ~ 5.0 Introduction 39 5.1 Discussions of the Findings 39 5.1.1 Findings on Agriculture Production 39

vi 5~1.2 Findings on Economic Welfare ~ 41

5.2 Conclusions 42

5.3 Recommendations ...... 44

5.4 Areas of further study~ 45

REFERENCES 46

APPENDIX 1: QUESTIONNAIRES 55

VII LIST OF TABLES

Table 4.2 Gender of the respondents ~ 24

Table 4.3 Marital status of the respondents ~ 25

Table 4.4 Age of the respondents ~ 26

Table 4.5 Level of education of the respondents .....~.. 27

Table 4.3: Agriculture production ~ 28 Table 4.4: Economic Welfare 33 Table 4.1 Response rate 23

VIII LIST OF FIGURES

Fig 4.2 Gender of the respondents 24

Fig 4.3 Marital status of the respondents ~ 25

Fig 4. 4 Age of the respondents ~ 26

Fig 4.5 Level of education of the respondents ~ 27

ix CHAPTER ONE INTRODUCTION LO. Introducfion The study is an investigation on agriculture production and economic welfare in Uganda, a case study of Kyazanga Sub County, Lwengo district. The study has two variables that’s the independent variable which is agriculture production and economic welfare as the dependent variable. Therefore, this chapter presents the background to the study, the statement of the problem, the purpose of the study and its objectives, the research questions, hypothesis, the study scope, significance and justification and operational definitions of key terms and concepts of study. Li Back ground to the Study During the 1960s a new consensus emerged to the effect that agricultural growth is critical (if not a precondition) for industrialization and general economic growth. Nevertheless, the process of agricultural growth itself has remained outside the concern of most development economists. Both technical change and institutional evolution have been treated as exogenous to their systems. In this paper we review the evolution of thought with respect to the process of agricultural development that is implicit in much of the literature on agricultural and economic development; we elaborate the concept of induced technical and institutional innovation which we have employed in our own research on the agricultural development process; and we discuss the implications of the induced innovation perspective for the design of national and regional strategies for agricultural development. (UNDP 2014)

Historically in the 1990s, developing countries, including Uganda, witnessed wide- ranging reforms in the agricultural sector. In Uganda, these reforms included, among others, liberalization of trade in agricultural inputs services and output; privatization of state-owned enterprises that supported production and marketing; and downsizing of civil servants who provided extension services. The reforms had both positive and negative consequences. Some of the negative effects of the reforms were income inequality and an increase in the proportion of the very poor in the early 1990s

1 (Muwanga 2001); the collapse of public extension, credit and marketing services (Semana 2004); and falling agricultural productivity, according to the Ministry of Agricultural, Animal Industry and Fisheries (MAAIF 2010).

To overcome the negative consequences of agricultural reforms, the government of Uganda, with support from the World Bank and other donors, restructured the country’s extension system, as part of the Plan for Modernization of Agriculture (PMA), from unified public extension to a public-private partnership (PPP) extension system. The reforms of the agricultural sector culminated in 2001 with the establishment of the National Agricultural Advisory Services Organization (through an act of Parliament, the National Agricultural Advisory Services Act of 2001) as a semiautonomous agency of the MAAIF, to manage the 25-year National Agricultural Advisory Services (NAADS) program. (World Bank, 2001).

Agrkufture is the cultivation and breeding of animals, plants and fungi for food, fiber, bio-fuel, medicinal plants and other products used to sustain and enhance human life.~11 Agriculture was the key development in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that nurtured the development of civilization. The study of agriculture is known as agricultural science. (Ted.R. Schultz, 2005)

Agricultural production is measured as the ratio of agricultural outputs to agricultural inputs. While individual products are usually measured by weight, their varying densities make measuring overall agricultural output difficult. Therefore, output is usually measured as the market value of final output, which excludes intermediate products such as corn feed used in the meat industry. This output value may be compared to many different types of inputs such as labor and land (yield). Egli, D.B. (2008). These are called partial measures of productivity. Agricultural productivity may also be measured by what is termed total factor productivity (TFP).

This method of calculating agricultural productivity compares an index of agricultural inputs to an index of outputs. This measure of agricultural productivity was established 2 to remedy the shortcomings of the partial measures of productivity; notably that it is often hard to identify the factors cause them to change. (Mundlak, Yair, 2007). Agricultural Productivity has been defined by several scholars depending on their disciplines. In economics, agricultural productivity refers to the output produced by a given level of input(s) in the agricultural sector of an economy (Fulginiti and Perrin, 2008). It may also be defined as “the ratio of the value of total farm outputs to the value of total inputs used in farm production” (Olayide and Heady, 2012). Productivity of agricultural is measured as the ratio of final output, in appropriate units, to some measure of inputs. Singh and Dhillion (2010) suggested that the “yield per unit” should be considered to indicate agricultural productivity. Many scholars have criticized this suggestion pointing out that it considered only land as a factor of production, disregarding other factors.

Economic Welfare: This is the level of prosperity and standard of living of either an individual or a group of persons or it’s the level of prosperity and quality of living standards in an economy. In the field of economics, it specifically refers to utility gained through the achievement of material goods and services. In other words, it refers to that part of social welfare that can be fulfilled through economic activity. (Samuelson, Paul A.2012).According to RoefieHueting, (2013) welfare is dependent on factors like employment, income distribution, labor conditions, leisure time, production and the scarce possible uses of the environmental functions.(Hueting, R. 2011). Economic welfare is measured in different ways, depending on the preferences of those measuring it. Factors used to measure the economic welfare of a population, include: GDP, literacy, access to health care, and assessments of environmental quality. (Dhillion, S. S. 2000).

The study is conducted in Lwengo District in the Central Region of Uganda and it is the largest town in the district and the location of the district headquarters. Lwengo District is one of the newest districts in Uganda. Created by an Act of Parliament, the district became functional on 1 July 2010. Before that, it was part of the Masaka District. Vision, Reporters (22 April 2010).The district has embarked on the educational agenda 3 and has produced academicians such as the economist Musoke N. Samuel who attained BSc (Mathematics & Economics) with a First Class Honors Degree award at Makerere University which is Uganda’s leading University. The 1991 national population census estimated the district population at 212,600. The next census in 2002 put the population at about 242,300. In 2012, the population was estimated at 267,300.Estimated Population of Lwengo District In 1991, 2002 & 2012. (Economic activity in Masaka District 2014). I am researching about this topic because, am in need of covering the gap left out by some researchers on the same topic with mine

The study was based on the Structural-change theory which deals with policies focused on changing the economic structures of developing countries like Uganda from being composed primarily of subsistence agriculture to a “modern, urbanized, and industrially diverse manufacturing and service economy.” There are two major forms of structural- change theory; W. Lewis’ two-sector surplus model, which views agrarian societies as consisting of large amounts of surplus labor which can be utilized to spur the development of an urbanized industrial sector (Lewis, 1954), and Hollis Cheney’s development patterns, which holds that different countries become wealthy via different trajectories.

According to this theory, an economy consists of an existing underdeveloped agricultural sector and a modern sector that is rapidly emerging with a small industrial sector. With both sectors co-existing in the economy, therein lies the crux of the development problem. According to Fei and Ranis (1964), development can be brought about only by a complete shift in the focal point of progress from the agricultural to the industrial economy, such that there is augmentation of industrial output, by transfer of labor from the agricultural sector to the industrial sector: implying that underdeveloped countries do not suffer from constraints of labor supply. (Darmasir, L.M. (2009).

L2 Probilem Statement Some studies have been conducted on agriculture for example; Agriculture, economic growth and development in Nigeria by M. A. Salako. (2015), Agricultural Productivity and Growth in Turkeyby Ays,e F mrohorog’~ luy (2012), Impact of agriculture on 4 economic growth in Chinonso Etumnu Nigeria by Sulaimon Aremu Yusuf (2013), but none of those studies have investigated the effect of agricultural production on people’s economic welfare in Uganda. Therefore this study seeks to bridge this gap by investigating the effect of agricultural production on economic welfare in Kyazanga Sub County, Lwengo district.

1.3 Object~ves of the Study 1.3.1 Generall Object~ve/ Purpose of the study The main objective of the study is to establish the effect of Agricultural advancement on economic welfare of the people of Kyazanga Sub County, Lwengo District.

1.3.2 Specific object~ves: i) To determine the level of Agricultural production in Kyazanga-Lwengo ii) To establish the level of economic welfare in Kyazanga-Lwengo iii) To show the impact of Agricultural production on economic welfare in Kyazanga Lwengo District.

1.3.3 Research Quest~ons i). What is the level of Agricultural production in Kyazanga-Lwengo? ii). What is the level of economic welfare in Kyazanga-Lwengo? iii). What is the impact of Agricultural production on economic welfare in Kyazanga Lwengo District?

1.4 Scope of the study 1.4.1 Content Scope The content scope of the study was made up of the level of Agricultural Production, Economic Welfare and the impact of Agriculture on Economic Welfare in Uganda.

5 L4~2 Geographka~ Scope The study was carried out in Kyazanga town council in the Lwengo District, Central Region of Uganda. Kyazanga is approximately 48 kilometers (30 ml), by road, west of Masaka on the all-weather highway between Masaka and Mbarara The coordinates of the town are 0°23’l 1 .0”S, 31°19t07~0”E (Latitude:-0.386389; Longitude:31.31861 1.

L4~3 T~me Scope The study was covered within a period of five months and that is from February to June, 2O17~sss

L5. S~gn~ficance of the Study~ To the Government: The results of this study can help the federal Government of Uganda to provide securities of life and properties, provision of infrastructural facilities like constant power supply, good roads, good health care services and drinkable water and among others for better performance of agriculture at reduced costs.

PoNcy Makers: In addition to the above, this study can help the policy makers to come up with policies that address the challenges faced by the youths when practicing agriculture. This can help to provide youths with secure business environment and eventually business growth.

The results in this study can also be beneficial to policy makers to seek ways on how best they can improve on agriculture productivity in rural areas of Uganda in general.

To the Academ~dans: The study shall help to build on the researcher’s knowledge and understanding of the study variables. It will also help the researcher to gain more skills of conducting research and this was important to the researcher while in office or pursuing further studies. 6 It is also hoped that the results in this study can help future researchers to carry out related studies on agriculture production and economic welfare in Uganda.

1.6 Operat~onal Definitions

Agricultural productivity: The output produced by a given level of input(s) in the agricultural sector of a given economy. It is the ratio of the value of total farm outputs to the value of total inputs used in farm production.

Economic Development: A multidimensional process that involves major changes in social structures, popular attitudes, and national institutions as well the acceleration of economic growth, the reduction of inequality and unemployment, and the eradication of poverty.

Food security: When all people at all times have access to sufficient, safe, nutritious food to maintain a healthy and active life.

Human Development Index (HDI): Is a summary measure for assessing long-term progress in three basic dimensions of human development: a long and healthy life, access to knowledge and a decent standard of living.

Inclusive growth: Economic growth process which advances equitable opportunities for economic participants with its benefits realized by every section of a society. It focuses on creating productive employment as a means of increasing the incomes of the poor and formerly excluded groups, so as to raise their standards of living. It involves growth in both income and equity or income distribution.

Poverty: The lack of basic needs and services such as food, clothing, beddings, shelter, basic health care, markets, education, information and communication.

7 Rura~ Development: Actions and initiatives in rural communities that are undertaken to improve the standard of living in those non-urban environments, such as infrastructure improvement and enhancement of existing industries. Unemployment: All the individuals who are without work/jobs: they may either be in the process of moving to new jobs or actively seeking work. The unemployment rate is calculated as a percentage by dividing the number of unemployed individuals by all individuals currently in the labor force.

8 CHAPTER TWO LITERATUR REVIEW 2.0 Introduct~on As chapter one outlined the background and objectives of this study including research questions as well research significance of the study, this chapter intends to present the theoretical and empirical literature reviews, knowledge and other information relevant to the theme of this study.

2.1 R&ated Stud~es According to M. A. Salako (2015), on Agriculture, economic growth and development in Nigeria, the findings revealed that the Agricultural sector has an insignificant average annual growth of 0.8% during the decade of 1959/60 and 1969/70 and a decline of - O.7% on the average through the 70/81 decade; implying a stagnation more or less during the two decades 1960- 1980. Considering the period 1970 to 85 before the Structural Adjustment Programme (SAP), the growth rate was a little above zero (0.3%) (Fashola, 2005). In 1985-2000 there were significant growth rate of 3.9%. The decades of 1981 to 1990, when foreign exchange earnings decline sharply.

The sector witnesses a significant growth rate of 4.1%. Any growth rate of agricultural sector that did not exceed population growth of 2.5 to 3.0 percent is considered insignificant if not disastrous, as it would lead to starvation or food insecurity. Consideration of the decades of 1990-2000, the sector is not performing appreciably with an annual growth rate of 3.3 % slightly exceeding the population growth rate of 2.5%. The initial impact of SAP seems to have promoted more rapid agricultural development but later slow down.

According to Lederman D. (2015), on Agricultural Productivity and Growth in Turkey, the finding indicated that labor allocation is mainly determined by increases in productivity in the agricultural sector during this time period in Turkey. We use this framework to investigate the role of productivity growth in agriculture versus non agriculture in impacting the speed of de-agriculturalization in Turkey. We ask what

9 would have happened to the share of employment in the two sectors and the overall GDP per worker if Turkey had inherited Spanish productivity growth rates starting in 1968. More importantly, we are interested in finding out if inheriting sectoral productivity growth rates in both sectors or in one of them in particular would have put the Turkish economy in a significantly different growth path. In the following counterfactual experiment, we allow Turkey to inherit productivity growth rates of Spain starting in 1968 in each sector one at a time.

According to Sulaimon Aremu Yusuf (2013) on Impact of agriculture on economic growth in Chinonso Etumnu Nigeria, the findings discovered that that the agriculture sector and industry are the largest contributors to economic growth in Nigeria. Without considering the size of contribution per period, the results show that from 1961 to 2011, the agriculture sector contributed most consistently to economic growth relative to the other sectors of the economy. Also, we observe that the trend in the contribution of the building and construction, trade and service sector are more similar to that of the industry sector than the agricultural sector.

This suggests that the industry may have stronger linkages to other sectors relative to agriculture and other sectors. This is because the trend of GDP growth in Nigeria reflects the economic consequences of various events experienced both in the country and globally. Instances highlighted from our data include the post oil boom era, the 1976-1980 periods, where economic growth fell from 23.68% in the previous period to 3.19%. Also the 1981-1985 periods, characterized by economic recession in the nation recorded a growth rate of -0.33%. This implies that the Nigerian economy has little ability to absorb shocks from economic and political crisis which could be a result of low national savings.

2~2 Theoretica~ Reviews The “Lewis linkages” between agriculture and economic growth provide the non agricultural sector with labor and capital freed up by higher productivity in the agricultural sector. These linkages work primarily through factor markets, but there is 10 no suggestion that these markets work perfectly in the dualistic setting analyzed by Lewis (1954). Chenery and Syrquin (1975), argue that a major source of economic growth is the transfer of low-productivity labor from the rural to the urban sector.

These insights by Lewis stimulated three lines of thought about the role of agriculture in economic development. First, the direct outgrowth of Lewis’ analysis of dual economies was formal two-sector modeling (Ranis and Fei 1961; Jorgenson 1961), with its focus on structural changes. Hayami and Ruttan (1985) explain how the dual economy literature marked an important break, introducing a “dynamic dualism” to replace prior, “static dualism” approaches that had mostly followed a descriptive, sociological and structural approach. Hayman and Ruttan concluded that neither modeling approach significantly advanced the understanding of how agricultural modernization actually takes place, although they acknowledged that the models help explain why it is necessary if overall economic growth is to take place. “The very simplicity of the models, a major source of their insight into the fundamental process of development, however, has led to substantial underestimation of the difficulties that face poor countries in achieving such a transformation (Hayman and Ruttan 1985).

Dual economy theory: At least three distinct models can be distinguished within Arthur Lewis’ seminal article entitled “economic development with unlimited supplies of labor11. The simplest describes a single modern enclave or capitalist nucleus that expands by attracting migrants from a traditional low-productivity hinterland. (UNDP, 2013). Profits earned within the enclave are reinvested in new capital stock and this further raises demand for labor. However, wages do not rise because the extra demand is met through immigration. Thus profits remain high and can continue to be reinvested in new capital stock. Within this model there is no trade in goods with the hinterland, which exists only as a labor reserve (Lewis, W. Arthur, 2004).

Three assumptions underpin this simple model. The first is the classical assumption of unlimited supply of labor at a slight premium to the wage in the traditional sector.

11 Empirical support for this assumption was provided in the form of evidence that non- capitalist agrarian institutions often encouraged populations to grow beyond the point at which the marginal product of labor was equal to the marginal return. (Stephen, C.S. 2011). The second assumption is of the existence of a dynamic business class (or state cadre) that reinvests the bulk of profits in new capital stock within the enclave. This assumption highlights the potential importance to development of ‘entrepreneurial culture’ and the evolution of institutions conducive to risk taking and investment. The third assumption is of balanced growth of supply in goods and services (hence responsive allocation of capital and skilled labor) to meet changing patterns of demand (for both wage and investment goods) as growth proceeds. This assumption highlights the possibility that growth may also be constrained by sector specific bottlenecks and the terms of external trade (World Bank, 2014).

Even without relaxing these assumptions, the model can readily be extended to accommodate more complex labor and capital allocation. With respect to labor, it explains how labor absorption into the modern enclave is governed not only by the simple wage differential, but also by the costs and probability of finding employment there. This explains why rural migration can persist even when there is widespread unemployment within the modern enclave. With respect to capital, on the other hand, the model highlights how economic growth can be expressed as a function of the rate of saving (determined within this model by the profit rate) and the marginal rate of return on capital in the modern enclave. For example, a 20 per cent saving rate combined with a marginal return on capital of 5 percent gives a growth rate (assuming zero depreciation) of 4 per cent per year.

This explains the preoccupation of classical development economists with mobilizing extra capital. It also provides an explanation for increasing inequality (or appropriation of the surplus over subsistence needs by the dynamic capitalist class) in the early stages of economic development. Finally, applying the concept of surplus labor to the entire world economy as a closed system highlights the importance of continued access

12 to a pool of cheap labor (particularly in China and India) to global profit and hence growth rates (Dhillion, S. 2010).

Second, the macro perspective and the importance of two-way linkages between rural and urban economies were stressed by Johnston and Mellor (1961). Johnston later became increasingly concerned about the size distribution of farms and the “uni-modal” lessons from East Asia for Africa and Latin America (Johnston and Kilby 1975; Johnston and Clark 1982). Mellor continued his focus on South Asia and the difficulties for the agricultural sector on its road to industrialization (Mellor 1966, 1976, 1986). Both saw higher productivity on small farms as the key ingredient to rapid poverty reduction and a healthy structural transformation.

The indirect “Johnston-Mellor linkages” allow input-output interactions between the two sectors so that agriculture can contribute to economic development. These linkages are based on the agricultural sector supplying raw materials to industry, food for industrial workers, markets for industrial output, and the exports to earn foreign exchange needed to import capital goods (Johnston and Mellor 1961). As with the Lewis linkages, it is difficult to see any significant role for policy or economic growth unless some of the markets that serve these linkages operate imperfectly. Resource allocations must be out of equilibrium and face constraints not immediately reflected in market prices if increases in agricultural output are to stimulate the rest of the economy at a rate that causes the “contribution” from agriculture to exceed the market value of the output, i.e., the agricultural income multiplier is greater than one (Timmer 1995).

The Johnston-Mellor model provided a strong narrative and conceptual argument for agriculture’s role in growth. The empirical roots of the paper were a (specific and highly contested) reading of historical experience, including from Europe and Japan, suggesting that growth success in these countries was closely linked to growth in agricultural productivity. Over the years, subsequent invocations of this theory became less nuanced, veering towards a more dramatic (and much less defensible) claim that

13 all successful countries pass through a phase of fast agricultural growth as the engine for their growth process (e.g., Timmer 1988). This argument resonates still in policy narratives; for example the influential World Development Report 2008 (World Bank 2007) highlighted the essential role of agriculture in early stages of development and made the case for a much stronger public policy focus on this sector from a growth perspective, not least in poor countries such as in sub-Saharan Africa. Theoretically, there is a solid basis for an argument that growth in agriculture is a key engine for growth, not least to start a growth process in pre-industrial economies

Beyond the more narrative approaches in the early literature, stylized macro models of growth with an explicit agricultural sector provide similarly strong predictions of the role of agricultural productivity growth in overall growth (e.g., Eswaran and Kotwal 1993; Echevarria 1997; Gollin, Parente and Rogerson 2002, 2004, 2007). These results tend to be linked to a set of key assumptions, including critically that these are closed economies that must meet their own food needs through domestic production. An additional assumption driving many of these models is that food consumption is subject to a minimum consumption requirement. Together, these two assumptions guarantee that a large fraction of resources will be tied to food production when countries have low agricultural productivity. The results of this rather stylized macro literature on structural transformation have been echoed in a literature that develops more empirically detailed macro models at the country level.

This includes in particular a literature based on analysis of Computable General Equilibrium (CGE) models that have been constructed and calibrated to social accounting matrices from developing countries. The prototype model of this kind is Robinson et al. (1982), updated by Lofgren et al. (2002) and used in various modified forms over the past decade by a number of researchers; e.g., Thurlow and van Seventer (2002), Dorosh and Haggblade (2003), Diao and Dorosh (2007), Pauw and Thurlow (2011), Dorosh and Thurlow (2012). A recent survey of this framework can be found in Diaz-Bonilla and Robinson (2010). These papers offer suggestive evidence that

14 relatively large overall gains in economic output can be obtained from investing in agricultural productivity. For example, a notable recent example is McArthur and Sachs (2013), who use a CGE model for Uganda to argue for an aid-financed boost to agricultural productivity as an engine of growth and development. A similar argument is presented in Diao et al. (2010).

Third, T.W. Schultz (1964) stressed the need for an “agrarian revolution,” or higher productivity through technical change in agriculture. He emphasized the importance of human capital, especially the education of rural workers, in facilitating productivity growth, and governments’ failure to provide appropriate policy environments (Schultz 1975). Masterfully synthesizing the main lessons from nearly five decades of such analysis, Staatz and Eicher (1998) explain:

By the end of the 1990s, development thinking had come nearly full circle. In the 1950s and 1960s, many development economists analyzed how the agricultural and nonagricultural sectors interacted during the process of economic growth, using simple two-sector models. This abstract theorizing was sharply criticized by dependency theorists, among others, who argued that such work abstracted from the institutional and structural barriers to broad-based growth in most low-income countries. During the 1970s and 1980s, the focus of research shifted to developing a more detailed theoretical and empirical understanding of the rural economy.

But the emphasis on structural adjustment in the 1980s forced reexamination of agriculture’s relationship to the macro economy. By the late 1990s, economists were again focusing on how the rural economy was linked to the broader world market, but they demonstrated a renewed recognition of how important institutions are in determining a country’s pattern of growth and the distribution of the benefits of that growth. Shaw, G. (2009).

15 In the ensuing decade, the profession finally got agriculture back on the broader development agenda. A key breakthrough was the publication by the World Bank (2007) of the World Development Report 2008: Agriculture for Development: Coordinated and drafted by Derek Byerlee and Alain de Janvry, this WDR was the first in a quarter century to focus specifically on agriculture. Its publication late in 2007, just as the world food crisis was heating up, looked prescient. Still, none of the major donor agencies have figured out how to gear up quickly to support more spending on agricultural development, partly because there remains deep uncertainty over what to do and how to do it (Saweda, L. 2011).

From a macro perspective, this uncertainty stems from two dimensions of the agricultural development process that remain poorly understood: the dynamic role of the rural non-farm economy and how it mediates the linkages between the farm sector and the macro economy during the structural transformation; and the political economy of agricultural policy and how that too evolves. Both topics have received substantial research attention almost from the beginnings of the field, but the research began to show new empirical depth and policy impact by the end of the 2000s (Haggblade, and Reardon 2007).

Formal two-sector models typically assumed the smooth functioning of the linkages that placed the fate of urban workers and farmers in each other’s hands. The actors, who mediate these linkages in a real economy, and how their role and structure change over the course of economic development, only became a topic of serious analysis in the 1970s. Then a veritable cottage industry sprang up to conceptualize and measure the “multipliers” implied by market-mediated linkages between agriculture and industry. Haggblade, Hazell, and Reardon (2007) nicely synthesize this literature, stressing the crucial and changing role of the rural non-farm economy.

The rural non-farm sector provides the bridge between commodity-based agriculture and livelihoods earned in the modern industrial and service sectors in urban centers.

16 Most rural households earn a large share of their incomes from non-farm sources, and often this sector is the “ladder” from underemployment at farm tasks to regular wage employment in the local economy and from there to jobs in the formal sector (Delgado, Hopkins and Kelly 1998; Mellor -2000; Barrett, Reardon and Webb 2001). The firms and activities in the rural non-farm sector mediate many of the two-way linkages between agriculture and the macro economy that are at the core of the development process. These linkages can be summarized in three categories (Timmer, 2002).

Before giving his definition of traditional agriculture, Schultz dispels some wrong impressions about what tradition agriculture implies. Traditional agriculture has nothing to do with the traditions of a society. According to Schultz agriculture can become traditional in any country, irrespective of the customs and conventions which its people have generally practiced. For example, it is not necessary that only a conservative, superstitions and a whimsical society can have a traditional agriculture. Even a forward looking society can find its agriculture to be traditional in nature. Schultz feels that most of the factors that influence production i.e. Thrift, attitude to work, industriousness etc. are not affected by the culture traits of a society. These are in-fact economic variable. People do not save for investment simply because the method of production does not give a high return. Again people do not work much because the return to labor is rather low. Accumulation of more capital or uses of more labor are thus governed by economic factors and not by the cultural factor (Timmer, 2009)

Traditional agriculture has nothing to do with the institution arrangement in a country. A country with any type of in situation arrangements can find its agriculture being traditional. For instance agriculture in a country can become traditional whether it has large farms or small farms though generally people feel that traditional agriculture is associated with small farm Japan’s agriculture is not traditional even if the farm size is very small. Similarly, traditional agriculture can be found, both in countries with a high degree of owner cultivation or with a high degree of tenancy, For example, Holland is a country where tenant cultivation predominates, however, its agriculture is not traditional. 17 Schultz further points out that the technical attributes of the factors of production in agriculture do not determine the character of agriculture in a country i.e, whether it, is traditional in character or not. Generally it is felt that if the factors of production are highly productive, its agriculture can be called a modern agriculture and if the factors of production have low technical efficiency, it is called a traditional agriculture, Schultz does not agree with this assertion Sadoulet, E. (2007). For him, traditional agriculture has some economic feature and if these features appear in an agriculture even with technically efficient factors it will become traditional in character According to him under certain circumstances, even American Agriculture which at present, is considered to be the most advanced agriculture can become traditional. According to Shultz traditional agricultural is all economic concepts (Mujumdar, N.A, 2007).

2~3 Conceptua~ framework Independent variabile Dependent variables

AGRICULTURE PRODUCTION ECONOMIC WELFARE

o Rearing of animals o Crop growing e Nutrition improvement o Forestry farming Increase in disposable • Fish farming income • Purchasing power o Poultry farming A o Good housing facilities o Bee keeping • Access to medical care services o Education status o Access to electricity

INTERVENING VARIABLE + o Political climate F~g~2~3 • Climate changes Government policy

18 From the Fig 2.3, Agricultural Production includes Animal rearing, crop crowing, forestry farming, fishing farming, poultry farming bee farming, Whereas Economic Welfare include; people’s purchasing power, nutrition improvement, good housing facilities, access to medical care service, education status and access to educationThe intervening variable shows the determinants of agriculture production and economic welfare and these include political climate, climatic changes and government policy.

19 CHAPTER THREE RESEARCH METHODOLOGy

3.0. Introduction Methodology refers to the means, techniques and frames of references by which researchers approach and carryout scientific investigations Kothari, (2OO4).ThI~ chapter begins with the research design; it further attempts to describe the target population of this study, Sampling technique, and the sample size. It also looks at the trust worthiness of the research instruments, data collection procedures and the data analysis methods.

3.1 Research Design This research was quantitative since it involved an inquiry into the identified/stated problem, based on testing the earlier stated hypotheses. In this study measurements were in numbers, and data analysis involved statistical techniques with an intention to determine whether the predictive generalizations of the hypotheses hold or not. Specifically, the study employed Causal Research Design as it attempted to measure what impact change in agricultural productivity had on the indicators of economic development for Uganda.

3.2 Study Population The population for this study was on all households engaged in agriculture (both crops and livestock production) in Uganda, estimated to be about 4 million. (MAAIF, 2011).

3.3 Study Sample This study used a sample of 30 households engaged in agriculture. The reason for the small sample size (30 respondents/households) is that the researcher was well aware that the resources, both time and money that available for this study was not enough to reach all farmers (households) in the country.

20 3.4 Data Collection methods Data for this study was collected using three methods:

(I) Questionnaires: Carefully constructed questions intended to solve the first and second specific objectives that were used for collecting primary data. Clear and simple questions was used to collect data that can enable the study to establish the major determinants of agricultural productivity in Uganda, and to ascertain if agricultural productivity is one of the binding determinants of inclusive growth in Uganda.

(ii) Interviews: This was used to consolidate the questionnaires and to generate more detailed data for agricultural productivity and the binding constraints to inclusive growth. It involved face to face interviews between the researcher and the identified interviewees (agricultural technical experts and selected farmers).

(iii) Record or documentary review. Carefully selected authentic and published documents considered as sources of secondary data for this study. Time series and panel data that were collected using record review was used to run panel data regression analysis or solve objective three and also answer research questions three and four.

3.5 Sampllng Strategy/technique Multi-stage sampling technique was applied; it is preferred because it enabled the researcher to effectively employ random or cluster sampling from the population. It also fosters convenient break down of groups and subgroups (regions/districts/counties) into smaller levels until the researcher reaches the desired type or size of the groups. To select the sample of 30 respondents of the farmers at random, the method was applied as follows:

21 The research considered all the five regions of the country (Central, North, East, West and South). The researcher selected two districts at random from each region as a way of spreading the samples/respondents. He then selected two counties at random from each of the districts and finally select 25 households (farmers) at random within each of the 20 counties to make up the sample of 30 households. This method allowed data collection in 20 relatively small areas instead of having to visit the farmers in all the districts/towns in the country. Only experienced adult farmers shall be considered to fill the questionnaires.

3~6 Data types and sources Both primary and secondary data were used for this study.

Primary data Primary data for this study were collected using questionnaires and interviews.

Secondary Data The secondary data for this study were mainly time series and panel. Secondary data on agricultural productivity, standard economic growth determinants, GNI per capita, HDI, JHDI and Gini-Coefficient that will be required for this study shall be got from the following sources:- Ministry of Finance Planning and Economic Development (MFPED): (http://www.finance.go.ug/). Data on income, GDP growth, government expenditures, economic performance, was obtained from here.

22 0 CHAPTER FOUR DATA PRESENTATION, ANALYSIS AND INTERPRETATION 4~O Introduction This chapter of the research report presents contains the statistical results that were generated from the data analysis and presents the findings based on the study objectives. It gives the demographic characteristics of respondents and variables used. The results were generated so as to appropriately address the research objectives and questions. The findings are presented in line with the stated objectives.

4~1 Response Rate The researcher distributed 35 questionnaires but was able to retrieve 30 questionnaires that were correctly filled and answered. This gave a retrieval rate of 30, according to Amin (2005), if the response rate is more than 70% it is enough to carry on and continue with data analysis. Table 4.1 continues to give a summary of response rates of each group of respondents.

Table 4~1 Response rate

4~2 Demographic characteristics of the respondents This section determines the demographic characteristics of respondents and to achieve it, questionnaires were distributed to different households in Kyazanga Sub County to capture these responses. Frequencies and percentage distribution tables were employed to summarize the demographic characteristics of the respondents in terms of age, gender, marital status, and education level. Tables below give the summary of the findings.

23 Table 4.2 Gender of the respondents

Table 4.2 revealed that majority 76.7% of the respondents were Females, while 23.3% Were males. The dominance of the female in the study implies that that most of the famers practicing agricultural farming in Kyazanga Sub County are female than men, and this is further illustrated in figure 42 below;

Fig 4.2 Gender of the respondents

Source~ Primary data, 2017

24 Table 4.2 revealed that majority, 50%of the respondents were Married, followed by 26.7% who were Single, while 16.7 of respondents were Divorced or separated and the least responses went to respondents who were Widowed with 6.7%. This implies that most of people in Kyazanga are married with families and thus had more knowledge on how agriculture production has sustained their families as illustrated in figure 4.3 below;

Fig 4.3 Marital status of the respondents

25 Table 4.4 Age of the respondents

Furthermore, table 4.2 revealed that majority, 43.3% of the respondents were within the age group of 36-50 years, followed by 23.3% who were within the age group of 51- 65% .years, while those within the age groups of 21-35,Uncler 21 and Over 65 were represented by 6,3and 1 respectively. The dominance of people within the age ranges of 53-50.implies that most of people in Kyazanga are in the age group of 35-50 year that there are still energetic enough to practice agriculture as seen in figure 4.4 below;

Fig 4.4 Age of the respondents

26 Fig 4.5 Level of education of the respondents The findings in table and figure 4.5 show that on the Level of education of the respondents in Kyazanga sub county, majority of people living the region are peasant farmers with poor education backgrounds and this was at 33.3% response rate, followed by another group of respondents who had only ended at Primary level of education and these were at 23.3% response. However, Degree holders in the region were the least estimated to only 6.7%, followed by both respondents who had Completed “A” Level and those who had attained Diplomas and this was only 10%, while the rest of the respondents living in the region had Completed “0” Level and these at l6.3%. This therefore shows that most of peasants farmers practicing agriculture in Kyazanga Sub County are not educated with poor education backgrounds.

Table 4,3: Agriculture production N=30 Agriculture production Mean Std~ Interpretation Deviation Rearing of animals I depend on animals as source of income 3.37 1.752 Satisfactory I donTt rear animals at all 3.72 1.579 Satisfactory I rear animals for house hold consumption 3.67 1.561 Satisfactory I have enough land to accommodate Satisfactory 3.50 1.570 animals i rear My village farmers depend on livestock Satisfactory 3.47 1.502 production Average mean is~cto~~ 3,55 1~593

Crop growing I carry out production on seasonal basis 3.10 1.647 Fairly satisfacto~7~ I normally practice cash crop farming 3.23 1.633 Fairly satisfactory I do practice food crop farming for my 3.13 1.592 Fairly satisfactory

28 house hold consumption I have enough market for selling my crops 3.17 1.341 ~i~I~atisfacto~i I normally use farm inputs like manure and Fairly satisfactory 3.20 1.690 fertilizers for my crop production Average mean Fahiy satisfactory 3.17 L581

Forestry farming I depend on forestry farming to earn a Fairly satisfactory 3.03 1.542 living I have enough piece of land to plant satisfactory 3.57 1.591 enough trees am supported by ministry of forestry and ~~isf~o~ animal rearing towards my forestry farming 3.20 1.518 business I normally sell my trees to furniture ~ 3.57 1.455 makers around my village I don’t practice forestry farming at all 2.87 1.383 ilatis~cto~i Average mean Fairly satisfactory 3.25 L498

Fish farming I do practice fish farming 3.90 1.398 satisfactory I have enough access to water sources in satisfactory 3.50 1.503 my village I have good fishing materials like nets and Fairly satisfactory 3.20 boats 1.448

I have good market for my fish produce 3.40 1.429 satisfactory I have enough support from the government 1.539

Average mean 3.47 1.463 Satisfactory

29 Poultry farming I keep and rear poultry breeds 2.23 1.695 ~ my poultry birds supply me with enough 2.73 1.617 Fairly satisfactory products for sell I rear poultry birds for home consumption 2.97 1.691 i~ly~tis~cto7 I have enough poultry mush to feed my 2.97 1.497 ysatisfact birds my birds are mostly affected by bird i~lysatisfact~ 2.97 1.426 poultry vices

Average mean 3,77 1.585 Satisfactory

Bee keeping I mostly keep bees for honey production 3.50 1.656 I normally sell honey in different markets isf~o~ for income support 3.50 1.614 my bees don’t produce enough honey 3.53 1.479 isfactoi~ I normally put in limited income to support my bee business 3.37 1.564 I don’t keep bees at all 3,33 1.729 Average mean 3,45 1~6O8 isfacto~~~

Overall average mean 3.44 L555

30 # Mean range Response mode Interpretation 5 4.01-4.75 Strongly agree Very satisfactory 4 3.26-4.00 Agree Satisfactory 3 2.51-3.25 Not sure Fairly satisfactory 2 1.76-2.50 Disagree Unsatisfactory 1 1.00-1.75 Strongly disagree Very ~ unsatisfactory

The results presented in the table 4.3 reveal that rearing of Animals was assessed by respondents as Satisfactory (Average Mean = 3,55, Std =1,593). This was attributed to the fact that majority of respondents agreed that rearing of animals is one major form of agricultural production and thus they depend on animals as their source of income( Mean=3.37, Std =1.752), rear animals for house hold consumption( Mean=3.67, Std 1.561),have enough land to accommodate animals they rear (Mean=3.50, Std =1.570), their village farmers depend on livestock production(Mean=3,47, Std =1.502), all the above results were interpreted as Satisfactory. This implies that the people in Kyazanga Sub County mainly depend on rearing since them; depend on animals as source of income, rear animals for house hold consumption, have enough land to accommodate animals they rear and also the village farmers in the region depend on livestock production as an economic activity.

Furthermore table 4.3 revealed that Crop growing was assessed by respondents as fairly satisfactory (Average Mean = 317). This was attributed to the fact that some group of the respondents were Not sure that some people in Kyazanga carry out production on seasonal basis (Mean= 3.10, Std 1.647),normally practice cash crop farming(Mean= 3.23, Std =1.633), do practice food crop farming for my house hold consumption (Mean= 3.13, Std =1.592), have enough market for selling my crops (Mean= 3.17, Std =1.341), normally use farm inputs like manure and fertilizers for my crop production (Mean= 3.20, Std =1.690).

31 This result was interpreted as fairly satisfactory. This implies that people in Kyazanga sub county ;carry out production on seasonal basis, normally practice cash crop farming, have enough market for selling my crops, do practice food crop farming for my house hold consumption and normally use farm inputs like manure and fertilizers for my crop production.

Similarly, table 4.3 revealed that Forestry farming was assessed by respondents as Fairly Satisfactory (Average Mean = 3.25, Std=1.498). This was attributed to the fact that majority of respondents were not so sure that forestry farming is one major form of agricultural production to earn a living (Mean= 3.03, Std =1.542),have enough piece of land to plant enough trees(Mean= 3,57, Std =L591), they are supported by ministry of forestry and animal rearing towards my forestry farming business (Mean= 3.20, Std = 1.518),normally sell their trees to furniture makers around their village (Mean= 3,57, Std =1.455),don’t practice forestry farming at all(Mean= 2.87, Std =1.383). This result was interpreted as Fairly Satisfactory. The above results imply that that people in Kyazanga Sub County don’t depend on forestry farming to earn a living.

In addition to the above results, table 4.3 revealed that Fish farming is assessed by respondents as Satisfactory (Average Mean = 3.47). This was attributed to the fact that majority of respondents Agreed that Fish farming is also greatly practiced by people in Kyazanga sub county to improve on their economic welfare since most of them do practice fish farming(Mean= 3.90, Std =1.398),have enough access to water sources in my village (Mean= 3.50, Std =1..503),have good fishing materials like nets and boats (Mean= 3.20, Std =1.448),have good market for my fish produce (Mean= 3.40, Std =1.429), have enough support from the government (Mean= 3.33, Std =1.539), thus this was interpreted as Satisfactory. The above results imply that that people in Kyazanga sub county; do practice fish farming, have enough access to water sources in my village, have good fishing materials like nets and boats, have good market for my fish produce and have enough support from the government.

32 In addition to this, the above results, table 4.3 revealed that Poultry Farming was assessed by respondents as SaUsfactory (Average Mean = 3~77)~ This was attributed to the fact that some group of the respondents were Not sure that some people in Kyazanga keep and rear poultry breeds (Mean= 2q23, Std =L695), my poultry birds supply me with enough products for sell (Mean= 2q73, Std L617), rear poultry birds for home consumption (Mean= 2.97, Std =1.691), have enough poultry mush to feed my birds (Mean= 2q97, Std =L497), and that their birds are mostly affected by bird poultry vices (Mean= 2~97, Std =L426)~

Lastly, Table 4.3 revealed that Bee Keeping is assessed by respondents as

Sat~sfactory (Average Mean = 3~45)~ This was attributed to the fact that majority of respondents Agreed that Bee Keeping is also greatly practiced by people in Kyazanga sub county mostly keep bees for honey production (Mean= 3~5O, Std =L656), normally sell honey in different markets for income support (Mean= 3~5O, Std =L6914), and they normally put in limited income to support my bee business (Mean= 3.37, Std =1.564)~ This therefore implies that people in Kyazanga sub county practice Bee keeping as an economic activity to improve on their economic welfare since they mostly keep bees for honey production, they normally sell honey in different markets for income support and they normally put in limited income to support my bee business.

Tab~e 4.4: Economk Welfare N=30

Economic weilfare Mean Std. Interpretation Deviation Nutrition improvement I have enough income to Fairly satisfactory improve on my family’s nutrition 2.70 1.535 support I practice agriculture production 2.77 1.478 Fairly satisfactory

33 for nutrition improvement I normally buy nutrition boosters Fairly satisfactory 2.70 1.489 in the market my family members are not Fairly satisfactory 2.70 1.643 malnourished at all Fairly satisfactory Average mean 2.72 1.536

Increase in d~sposabile income I have enough income at Fairly satisfactory 2.93 1.617 disposal my family greatly depend on Fairly satisfactory income I earn from my 2.80 1.584 agriculture products i acquire limited income from my Fairly satisfactory 2.60 1.453 farming practices I normally pay revenue for my 2.77 1.50 1 Fairly satisfactory farming business Fairly satisfactory Average mean 2.78 1.538

Purchasing power I have high purchasing power to Fairly satisfactory 2.80 1.495 acquire all my family basic needs I normally fail to purchase items Fairly satisfactory 2.93 1.507 for my household consumption i normally earn less compared to unsatisfactory how much i spend on my family 2.27 1.484 welfare Fairly satisfactory Average mean 2.67 1.495

34 Good housing facUities I have access to electricity in my Fairly satisfactory 2.77 1.524 house i have enough water for my Fairly satisfactory 2.63 1.542 household consumption I have a challenge in acquire Fairly satisfactory my housing facilities due to 2.70 1.393 limited earnings My housing facilities are in poor Fairly satisfactory 3.10 1.539 condition My house can accommodate 5- Fairly satisfactory 3.00 1.597 10 people at once Average mean Fairly satisfactory 2.84 1.519

Access to medica~ care services I have good access to medical Fairly satisfactory 2.63 1.586 facilities I have enough income to Very satisfactory 4.97 1.575 support my health I normally fail to offer to my Fairly satisfactory 3.20 1.606 family a good medical attention My house normally has Fairly satisfactory 3.07 1.639 emergency medical drugs Average mean 3.47 1~6O1 satisfactory Education status I am able to provide good Fairly satisfactory 2.67 1.583 education to my children I have small income to facilitate 2.70 1.393 Fairly satisfactory

35 the big number of children i have My village have some primary Fairly satisfactory schools and one secondary 3.17 1.577 school I can afford to take my children Fairly satisfactory 2.73 1.596 up to primary seven level Fairly satisfactory Average mean 2.82 1.537

Fairly satisfactory Overall Average mean 2.88 1.537

# Mean range Response Interpretat~on mode 5 4.01-4.75 Strongly agree Very satisfactory 4 3.26-4.00 Agree Satisfactory 3 2.51-3.25 Not sure Fairly satisfactory 2 1.76-2.50 Disagree Unsatisfactory 1 1.00-1.75 Strongly Very disagree unsatisfactory

The results presented in table 4.4 revealed that Nutrition Improvement was assessed by respondents as fairly satisfactory (Average mean = 2.72, Std =1.536). This was because majority of respondents were Not Sure whether Nutrition improvement was among the achievements of agriculturalists in Kyazanga Sub county due to the fact that most of them have enough income to improve on my family’s nutrition support ( Mean=2.70, Std=1.535), practice agriculture production for nutrition improvement ( Mean=2.77, Std=1.478), normally buy nutrition boosters in

36 the market ( Mean=2.70, Std=1.489 ) their family members are not malnourished at all ( Mean=2.70, Std=1.643). This implies that Nutrition Improvement has been successful among farmers in Kyazanga Sub County since they have enough income to improve on my family’s nutrition support, practice agriculture production for nutrition improvement, normally buy nutrition boosters in the market and their family members are not malnourished at all.

The findings in table 4.4 revealed that Increase in Disposable Income was assessed by respondents as fairly satisfactory (Average mean= 2J8, Std =L538), This was because majority of respondents were Not Sure whether Nutrition improvement was among the achievements of agriculturalists in Kyazanga Sub County due to the fact that most of them have enough income at disposal (Mean=2.93, Std=1.617), their family greatly depend on income they earn from my agriculture products (Mean=2.80, Std=1.584), they acquire limited income from my farming practices (Mean=2.60, Std=1.453), normally pay revenue for my farming business (Mean=2.77, Std=1.501). This implies that Increase in Disposable Income has been successful among farmers in Kyazanga Sub County since they have enough income at disposal; their families greatly depend on income they earn from their agriculture products, acquire limited income from their farming practices, and normally pay revenue for their farming business.

The findings in table 4.4 revealed that Purchasing Power was assessed by respondents as fairly satisfactory (Average mean= 2q67, Std =L495)~ This was because majority of respondents were Not Sure whether Purchasing Power was among the achievements of agriculturalists in Kyazanga Sub County due to the fact that people in Kyazanga sub county have high purchasing power to acquire all my family basic needs (Mean=2.80, Std=1.495), normally fail to purchase items for my household consumption (Mean=2.93, Std=1.507), normally earn less compared to how much i spend on my family welfare (Mean=2.27, Std=1.484).

The findings in table 4.4 revealed that Good housing faciNties was assessed by respondents as Fairly satisfactory (Average mean= Z84, Std =1~519), 37 Purchasing Power was assessed by respondents as Fairly satisfactory (Average mean= 2.67, Std =1.495). This was because majority of respondents were Not Sure whether Good housing facilities was among the achievements of agriculturalists in Kyazanga Sub County due to the fact that some people in Kyazanga sub county don’t have access to electricity in their houses (Mean=2.77, Std=1.524), have enough water for my household consumption (Mean=2.63, Std=1.542),have a challenge in acquire their housing facilities due to limited earnings, (Mean=2.70, Std=1.393), their housing facilities are in poor condition (Mean=3.10, Std=1.539) and that their houses can accommodate 5-10 people at once (Mean =3.00, Std=1.597).

The findings in table 4.4 revealed that Access to medical care services was assessed by respondents as Satisfactory (Average mean= 3.47, Std =1.601). This was because majority of respondents were Not Sure whether Access to medical care services was among the achievements of agriculturalists in Kyazanga Sub County due to the fact that most of the people in this region have good access to medical facilities (Mean=2.63, Std=1.586), have enough income to support my health (Mean=4.97, Std=1.575), normally fail to offer to my family a good medical attention (Mean=3.20, Std=1.606), their houses normally has emergency medical drugs (Mean=3.07, Std=1.639)

Finally, the findings in table 4.4 revealed that Education status was assessed by respondents as Fairly Satisfactory (Average mean= 2.82, Std =1.537). This was because majority of respondents were Not Sure whether Education status was among the achievements of agriculturalists in Kyazanga Sub County due to the fact that most of the people in this region are unable to provide good education to their children(Mean=2.67, Std=1.583), have small income to facilitate the big number of children they have (Mean=2.70, Std=1.393), their villages have some primary schools and one secondary school (Mean=3.17, Std=1.577) and that they can afford to take my children up to primary seven level (Mean=2.73, Std=1.596) were assessed as fairly satisfactory.

38 CHAPTER FIVE DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS 5.0 Introduction This chapter present the Discussion based on the research findings in this study, it equally focus on major conclusion, key recommendations and areas for further study.

5~1 Discussions of the Findings 5.1.1 Findings on Agricuilture Production This study was set to find out the relationship between Agriculture Production and Economic Welfare in Kyazanga Sub County. From data analysis using means, the findings revealed that the level of Agriculture production by the people in Kyazanga sub county was rated high since most of them embark on Rearing of Animals and this was indicated by the overall mean (Mean = 3.25). And this implies that on overall Agriculture production in Kyazanga was highly advantageous to farmers in the sub county since most of them rear animals for house hold consumption, have enough land to accommodate animals they rear, their village farmers depend on livestock productions

The findings also revealed that Crop growing is also another major economic activity which has boosted the economic welfare of the people of Kyazanga sub county as

indicated by an (Mean = 3.17). This was because the people in Kyazanga Sub County normally practice cash crop farming, does practice food crop farming for my house hold consumption, have enough market for selling my crops, normally use farm inputs like manure and fertilizers for my crop production. This result was interpreted as fairly satisfactory. This implies that people in Kyazanga sub county ;carry out production on seasonal basis, normally practice cash crop farming, have enough market for selling my crops, do practice food crop farming for my house hold consumption and normally use farm inputs like manure and fertilizers for my crop production.

39 The findings further revealed that Forestry farming is also another major activity practiced by the farmers in Kyazanga sub county because forestry farming was found to be one of the major form of agricultural production in which the people greatly depended on to earn a living, the people in the region also have enough piece of land to plant enough trees in which they can sell and income in return since they also happen to be supported by ministry of forestry and animal rearing towards my forestry farming business, and they also normally sell my trees to furniture makers around my village.

The findings of the study also indicate that agricultural productivity improvements are likely to benefit rural agricultural provinces less than urban non-agricultural provinces. This could be due to deterioration in the agricultural terms of trade. However, increased output, decline in market prices and increase in overall aggregate employment would make households better off across provinces.

The findings revealed that Fish farming is also another activity practiced by farming the Kyazanga sub county region and this is because most of the farmer shave enough access to water sources in my village ,have good fishing materials like nets and boats, have good market for my fish produce, have enough support from the government as indicated by the overall mean of (Mean = 3.47)Jhe above results imply that that people in Kyazanga sub county; do practice fish farming, have enough access to water sources in my village, have good fishing materials like nets and boats and others.

The findings revealed that Poultry Farming is also another agriculture activity practiced by farmers in Kyazanga sub county region due to the fact that most of them keep and rear poultry breeds, their poultry birds supply them with enough products for sell, rear poultry birds for home consumption, have enough poultry mush to feed my birds and also that their birds are mostly affected by bird poultry vices, as indicated by the overall

mean of (Mean = 3,45).

40 The results from the findings also indicate that Bee Keeping is also another agriculture activity practiced by farmers in Kyazanga sub county region basing on the assertion that most of the farmers in the region mostly keep bees for honey production, normally sell honey in different markets for income support, and they normally put in limited income to support my bee business, and this was indicated by an overall mean of (Mean = 3~45), which implied that people in Kyazanga sub county practice Bee keeping as an economic activity so as to earn and improve on their economic and social welfare.

5~L2 F~nd~ngs on Economk Weilfare The findings revealed that the good economic welfare of the people living in Kyazanga Sub County has been identified through Improved Nutrition of the people in the region since most of them have enough income to improve on my family’s nutrition support, practice agriculture production for nutrition improvement, normally buy nutrition boosters in the market, their family members are not malnourished at all.

The findings revealed that the good economic welfare of the people living in Kyazanga Sub County has been identified through Increase in Disposable Income which was because most of them have enough income at disposal, their family greatly depend on income they earn from my agriculture products, they acquire limited income from my farming practices, normally pay revenue for my farming business.

The findings revealed that Purchasing Power of people of Kyazanga sub county was also another determinant of their economic welfare since most of them have high purchasing power to acquire all my family basic needs, normally fail to purchase items

for my household consumption , normally earn less compared to how much i spend on my family welfare.

The findings also revealed that Good housing facilities was also an indicator of improved economic welfare of the people in Kyazanga sub county as most of them have access to electricity in my house, have enough water for my household consumption ,have a challenge in acquire my housing facilities due to limited earnings, (their housing facilities are in poor condition and also due to the reason that their houses can 41 accommodate 5-10 people at once which proves that they are able to sustain and survive.

The results from the study also revealed that Access to medical care services was also seen as a good indicator to good economic welfare as it was noticed that people in Kyazanga sub county have enough income to support my health, normally fail to offer to my family a good medical attention and that their houses normally has emergency medical drugs which can cater for situations like emergency sicknesses and diseases which normally attack the people like malaria,

The findings also revealed that good education status of the people of Kyazanga sub county proved to be another indicator of improved economic welfare as most of the people in this region are able to provide good education to my children, have small income to facilitate the big number of children they have, their village have some primary schools and one secondary school and that they can afford to take my children up to primary seven level.

It is clear from the above findings, the results showed that increasing agricultural productivity would generate positive economic benefits to the country as targeted in the development framework. Increase in agricultural productivity stimulate the growth of not only agriculture sector but also manufacturing and services sectors. However, it cause decline in agriculture related employment. Moreover, all the provinces record positive regional GDP from increased agricultural productivity while agricultural provinces record the highest.

5~2 ConcOusions Agriculture provides both food and raw materials to the rest of the economy since a growing agricultural sector provides an enlarged market as it expands aggregate demand. It also provides labor for employment in the industrial sector; and agriculture is often a principal source of capital for investment and this has greatly helped to boost the economic welfare of people in Kyazanga sub county and Uganda at large.

42 Exports from the agricultural sector are important to earn foreign exchange which is critical for imports of capital goods and other equipment for rapid industrialization and economic growth Up to now, a key element in the growth strategy of Kyazanga Sub County has been strengthening of its agricultural base that would foster growth of other sectors as well. It has strong links with the rest of the economy by providing raw materials to industry and a market for goods and services produced by other sectors.

As the largest contributor to GDP, Agriculture is the key sector on which reliance has to be placed to mobilize resources for capital formation and economic development. Thus the rise in agricultural productivity will release workers from food production for employment in other sectors.

Building infrastructure for rural development such as dams, roads and railways, especially in remote areas, brings benefits to geographically disadvantaged groups and thus meet the country’s social concerns. Hence, there are strong economic and social imperatives for Kyazanga Sub County to build up its agricultural base.

A sound agricultural base will provide a good foundation for the development of agro, wood, marine, and other traditional resource-based industries. But the world, on the threshold of the twenty-first century, has been moving away from such industries. The new age does not rely on raw materials but is service-oriented and is based on technology, information, knowledge, organizational and entrepreneurial skills and human resources development. According to the nature and present situation of Kyazanga Sub County, as a developing nation, the economy still relies heavily on agriculture products.

Therefore, Kyazanga Sub County is now on a steady growth path, although the government’s ongoing economic reforms have changed many facets of the economy, the pace of economic growth is still not rapid enough to compensate for the economic stagnation of the preceding quarter century.

43 The satisfactory growth rate of the economy achieved in recent years was primarily attributable to the very good performance of agriculture sector in Uganda which is the predominant sector of the economy.

53 Recommendations For the sector to continue to play its major role in the development process, the following recommendation will be offered:

Agricultural friendly government policies and policy orientation must be put in place. There must be favorable change in government attitude. The transformation agenda of Uganda is aright action in the right direction as agricultural sector is given a considerable developmental attention. This study is now recommending that the provision of the transformation agenda should be rigorously pursue without any subjugation.

There is a need for some market intervention practices by the government such as agricultural price support as suggested by Bautista (Bautista, 1986) or establishing processing industries in the agricultural regions to ensure not only gains at national level but also greater share of gains for households from agricultural provinces from increased productivity.

The Government of Uganda should implement a comprehensive plan to develop the agriculture sector to the point where the nation’s agricultural production will be sufficient to sustain the population and hopefully increase its export earnings.

The government should also make serious efforts to lay a firm foundation for future generations and thus this would be successful through implementing a multi-sectoral nation-building program.

44 Uganda possesses abundant arable land, about 90% of which is unutilized. Government must ensure that it enforces the provisions of the land Use Act, and discourage harassment of agricultural investors or farmers with right of occupancy conferred by the state .Due to the fact that there is a long dry season (six months more or less) during which period farmers are idle and seek gainful employment in urban centers. With irrigation facilities, half of the year becomes available for farming activities, apart from the fact that irrigation permits proper control of water to maximize yield unlike the unpredictable rainfall.

Government should ensure and make provision for efficient irrigation and optimal water resource management. Suitable rural infrastructure development should be made priority by the government. This must take into consideration the special needs of rural areas and agricultural sector. For instance, intermit transportation; the vehicles like ‘Keke NAPEP’ will be more suitable for them, as the maintenance cost will be low and it will be easy for the farmers to transport their goods and output.

5.4 Areas of further study Agricultural production and poverty reduction in Uganda Agricultural production and employment in Uganda Agricultural production and General prices in Uganda o Agricultural production and Household income in Uganda

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47 Mujumdar, N.A. (2007). Inclusive Growth; Development Perspective in Indian Economy New Delhi: Academic Foundation.

Nabbumba, R., &Bahiigwa, G. (2013).Agricultural Productivity Constraints in Uganda: Impilcations for Investments. Kampala: Uganda.

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Ministry of Agriculture, Animal Industry and Fisheries. Retrieved February 10, 2014,

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Shaw, G. (2005). Voices from the Bush: context and learning in rural and remote settiogs. Dealing with diversity,Darwin, NT: Charles Darwin University Press.

Singh, J., &Dhillion, S. S. (2000). Agricultural Geography (2nd ed.) New Delhi : McGraw Hill.

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48 UNDP. (2013). Human Development Report 2013: The Rise of the South. New York: UNDP

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World Bank. (2009). World Development Report 2009: Geography hi motion. Washington DC: World Bank

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World Bank.(2001). PRSP Progress Repor/~, 2001. Washington DC: World Bank

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World Bank. (2014). Food Crisis: The Role of Agricultural Productivity. Accessed April 15, 2014, from: http ~ agricultural-productivity

Zepeda, L. (2001). Agricultural In vestment, Production Capacity and Productivity Geneva: FAO

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Sen, A. (1999). Development as Freedom. New York: Anchor Books

Barro, R. (1998). Notes on Growth Accounting. Journal of Economic Growth, Harvard University. Cambridge. Retrieved May 4, 2014,

Berg, Andrew, & Jonathan D, 0. (2011a). Inequality and Unsustainable Growth: Two Sides of the Same Coin? IMF Staff DLsrussion Note 11/08 (Washington: International Monetary Fund).

Bravo-Ortega, C., & Lederman D. (2005).Agriculture and National Welfare around the World: Causality and International Heterogeneity since 1960. Washington DC: World Bank PRWP Series 3499.

Chenery, H, B., & Taylor, L. (1968). Development Patterns: Among Countries and Overtime. Economic Development Repor4 102 (1). 1-64.

Commission on Growth & Development.( 2008). Growth Report: Strategies for Sustained Growth and Inclusive Development .Washington: World Bank.

Darmasir, L.M. (2009). Measuring Agricultural Productivity Using Average Productivity Index. Sri Lanka Journal ofAdvanced Social Studies, 2(1).

Foster J., Lopez-Calva L., &Szekely, M. (2005). Measuring the Distribution of Human Development: Methodology and an application to Mexico.Journal of Human Development and Capabillties, Taylor & Franci9 Journals, vol. 6(1), 5-25

50 Fulginiti, L., & Perrin, R. (1998).Agricultural Productivity in Developing Countries. Agricultural Economics, 19: 45—51.

Garido,L, &Ianchovichina, E. (2009). Growth Decomposition and Productivity Trend Washington DC: Economic Policy and Debt of the World Bank.

Gujarati, D.N. (2006). Basic Econometrics. New York: McGraw-Hills Companies

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Lewis, W. Arthur~(1954). Economic Development with Unlimited Suppiles ofLabor Manchester School of Economic and Social Studies, Vol. 22, pp. 139-91. 52

IFAD. (2013). Enabling Poor Rural People to Overcome Poverty in Uganda. Rome: IFAD Retrieved January 10, 2014

IFPRI.(2012). Rural-Urban Transformation in Uganda. Kampala: IFPRL Accessed December 10, 2013,

IFPRL(2008). Land Tenure &Agricultural Productivity in Uganda. Kampala: IFPRI

51 Kostas, S., & Alberto, Z/FAO.(2003). Agriculture and rural Development in the 21st Century. ESA Working Paper No. 03-17, pg 33-35

Kuku,O., Ajibola, A., & Saweda, L. (2011). A Review of Literature on Agricultural Productivity, Social Capital and Food Security in Nigeria.NSSP Working Paper No. 21. Abuj~: IPPRI

Lewis, W. Arthur.(1954). Economic Development with Unlimited Supplies of Labor. Manchester School of Economic and Social Studies, Vol. 22, pp. 139-91.

Ligon, E., &Sadou let, E. (2007). Estimating the Effects ofAggregate Agricultural Growth on the DLs-tribution of ExpendItures. Background paper for the WDR 2008. Washington: World Bank

Mugenda,O.M., &Mugenda, A.G. (2003). Research Methods: Quantitative and Qualitative Approaches. Nairobi: ACES

M uju mda r, N .A. (2007). Inclusive Growth: Development Perspective in Inth~n Economy New Delhi: Academic Foundation.

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Ministry of Agriculture, Animal Industry and Fisheries. Retrieved February 101 2014,

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Shaw, G. (2005). Voices from the Bush: context and learning in rural and remote settings. Deallng with diversib,-’ Darwin, NT: Charles Darwin University Press.

Singh, J., & Dhillion, S. S. (2000). Agricultural Ceography(2nd ed.) New Delhi : McGraw Hill.

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Todaro, M.P~, Stephen, C.S. (2011). Economic DevelopmenL New York: Addison Wesley.

UNDP. (2007). Human Development Report 2007/08: Aghting Cilmate Change. New York: UNDP

UNDP. (2013). Human Development Report 2013: The Rise of the South. New York: UNDP

United Nations.(2014). UN Network on Food Security and Rural Development. Agriculture. Accesses March 30, 2014,

World Bank. (2008). World Development Report 2008: Agriculture for Development Washington DC: World Bank

World Bank. (2009). World Development Report 2009: G’eography In motion. Washington DC: World Bank

53 World Bank. (2014). Poverty Overview: Accessed April 20, 2014, from: ~

World Bank.(2001). PRSP Progress Report 2001. Washington DC: World Bank

World Bank.(2014). GNI per capita, Atlas method. Accessed May 5, 2014, from: http ://data .worldbank.org/indicator/Ny.~Np~ PCAP.CD

World Bank. (2014). Food Crisis: The Role of Agricultural Productivity. Accessed April 15, 2014.

Zepeda, L. (2001). Agricultural In vestment~-, Production Capacity and Productivity. Genev°a: FAQ

54 APPENDIX I

QUESTIONNAIRES Respondent’s Questionnaire

I am KAYESU DOREEN, a student of Kampala International University pursuing a bachelor’s degree of Arts in Economics and undertaking a research on ~Agriculture product/on and economic welfare in Uganda’~ The research aims at determining the level of agriculture production in Kyazanga-Lwengo District.

As a process of data collection for this research, I am requesting you to provide me with some information. This can easily be done by filling the following questionnajre, Please answer the questions as honestly as possible; the information you give wilI~ be treated with maximum confidentiality and solely for the purpose of this research, Thank you

SECTION A: DEMOGRAPHIC CHARACTERISTICS OF THE RESPONDENT,

L Gender

a. Female

b. Male L1

2. Marfta~ Status a) Single b) Married c) Divorced /separated d) Widowed

3, Age

(a) Under 21 (b) 21 -35 (C) 36 -50

(d) 51- 65 (e) over 65

55 4~ Level of education of respondents

(a) No education (b) Primary (C) Completed 0” level E1 (d) Completed A” level (e) Diploma (f) Degree 55

SECTION B: QUESTIONNAIRE ON ECONOMIC WELFARE

Evaluate the following statements by ticking and filling the appropriate response basing on the scale below.

Please do not leave any item unanswered

# Agrkullture Product~on I 2~3 4 5 A Rearing of animalls 1. I depend on the animals as a source of income 2. I don’t rear animals at all

3. I rear animals for house hold consumption —~ 4. 1 have enough land to accommodate the animals I rear 5. My village farmers depend on livestock production B Crop growing 1. I carryout crop production on seasonal basis 2. 1 normally practice cash crop farming 3. I do practice food crop farming for my household Consumption 4. I have enough market for selling my crops 5, I normally use farm inputs like manure and fertilizers for

56 my crop production C Forestry Farmüng

1. ~--—I depend on forestry farming to earn a living 2. I have enough piece of land to plant enough trees 3. ~--—I am supported by the Ministry of forestry and animal rearing towards my forestry farming business

4. I normally sell my trees to furniture makers around my village 5. ~--—~I don’t practice forestry farming at all.

D. ~-—-Fllsh farmrng

1. ~---~I do practice fish farming

2. ~--~--I have enough access to water sources in my village

3. I have good fishing materials like nets and boats — —

4. ~--—-I have good market for my fish produce

~--—-5. I have enough support from the government

E. ~--—-Poufttry Farmrng 1. I keep and rear poultry breeds 2. My poultry birds supply me with enough products for sell 3. I rear poultry birds for home consumption j 4. I have enough Poultry Mush to feed my birds H—5. -~------~---~---~My birds are mostly affected by bird poultry vices F. Bee keeping 1, I mostly keep bees for honey production 2. I normally sell honey in different markets for income

____ support 3. My bees don’t produce enough honey 4. I normally put in limited income to support my bee

____ business ~

57 SECTION C: QUESTIONNAIRES ON ECONOMIC WELFARE

~micWegfar~ ~tãOn improveme~~

nutritional support I practice agriculture production for nutrition improvement I normally buy nutrition boosters from the markets are not malnourished at all

~iculture products I acquire limited income from my farming practices I normally pay revenue for my farming business ~as~ngpowe~

basic needs I normally fail to purchase items for my household

I ~

Go~

~ to limited earnings My housing facilities are in poor conditions ~ to med ~caI ca re se~~ces

I have enough income to support my health ~

~58 F Educat~on status 1. I am able to provide good education to my children 2. I have small income to facilitate the big number of children I have 3. My village has some primary schools and one secondary schools 4. The biggest percentage of villagers in Kyazanga can afford to take their children up to primary seven level I have a degree level

Thank you for your corporat~on and response

59