The study evaluated the socio-economic viability and factors influencing profitability of apple enterprise under smallholder farming system in Uganda. A sample of 52 apple farming households was randomly selected in the districts of Uganda: Kabale, Kisoro, Kanungu and Rukungiri. Data were collected with the use of structured questionnaires, and analyzed using descriptive statistics, gross margin analysis and multiple regression model. The results showed that apples were planted on small scale with only 6% of land allocated to total apple enterprise in 2011. However, land allocation to apple enterprise is increasing and the enterprise currently covers 20% of farm lands. The dominant varieties among apple farmers are Golden Dorset, 56.1% and Anna, 40.9%. Men constituted 74.5% of the apple farmers, while the mean age of apple farmers was 57 years, with an average experience of over 10 years. Gross margin of apple enterprise in Kabale and Kanungu district had a positive ratio of return on investment of 1.5 and 1.7, respectively. Kisoro and Rukungiri districts had a negative ratio of return on investment of (0.9 and 0.3, respectively). Ordinary least squares (OLS) results indicated that the gender of the respondent, family size, access to credit, influence of birds, type of apple variety, number of apple trees planted, amount of labor used and quantity of inorganic fertilizers applied were significant determinants of net income in apple production. There is need to reduce the labor costs in apple establishment and management, promote strategies that encourage the youth to participate in apple farming. Research has to come up with an effective but affordable remedy against the negative influence of birds in apple production. Farmers need to be linked to financial providers for credit access at low interest rate in order to facilitate routine apple management practices.
Key words: Apple enterprise, smallholder farmers, gross margin, return on investment.
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