Abstract

Increasing crop market participation has the potential to help agricultural households unlock the well known benefits of trade. In this article a double hurdle model and a tobit model are used to identify factors that influence market participation decisions among Ugandan banana growers. This article is motivated by the need to better understand the drivers of commercialisation for a perishable crop. Data for the econometric analyses come from a household survey conducted in Southwestern Uganda. Policies focused on improving banana-growing productivity, increasing prices and reducing the economic costs of distance to market appear important in helping the Ugandan government achieve its goal of a more commercialized agricultural sector. Increasing land size does not help generate larger marketable surpluses when distance to markets increase. Thus, gains in crop productivity appear important in facilitating more market exchanges.

Key words: Uganda, market participation, bananas, econometrics.