Can the Benefits of Developed Country Agricultural Trade Reforms Trickle Down to the Rural Agricultural Households in Least Developed Countries: Analysis Via Price Transmission in Selected Agricultural Markets in Uganda

56 Pages Posted: 22 Aug 2006

See all articles by Michael Atingi-Ego

Michael Atingi-Ego

Bank of Uganda - Research Department

Jacob Opolot

Bank of Uganda - Research Department

Anna Santa Drale

Bank of Uganda - Research Department

Date Written: June 2006

Abstract

This paper investigates the extent of price transmission from international to domestic markets for selected agricultural products in Uganda, so as to assess the likely impact of increased market access on agricultural household poverty in rural Uganda. The study applies a variety of econometric techniques to assess the various components of market integration using monthly data over the period 2000 through 2004. The results indicate that there is price transmission from world market prices to border prices in the case of cotton, tea and tobacco. However, there is insufficient evidence of price transmission from border prices to producer prices. We also found evidence to support the null of no price transmission from border to producer prices for the non-traditional exports of beans, maize and banana, which are mostly exported to the regional market. We recommend that Government should strengthen the information network on agricultural marketing and distribution so as to reduce exploitation of smallholder farmers by well-informed middlemen. Government should also strive to increase investment in the agricultural sector so as to improve marketing and transport infrastructure.

Keywords: Agricultural trade, price transmission, developing countries

JEL Classification: Q13, Q17

Suggested Citation

Atingi-Ego, Michael and Opolot, Jacob and Santa Drale, Anna, Can the Benefits of Developed Country Agricultural Trade Reforms Trickle Down to the Rural Agricultural Households in Least Developed Countries: Analysis Via Price Transmission in Selected Agricultural Markets in Uganda (June 2006). IIIS Discussion Paper No. 159, Available at SSRN: https://ssrn.com/abstract=925681 or http://dx.doi.org/10.2139/ssrn.925681

Michael Atingi-Ego

Bank of Uganda - Research Department

P.O. Box 7120
37/43 Kampala Road
Kampala
Uganda

Jacob Opolot (Contact Author)

Bank of Uganda - Research Department ( email )

P.O. Box 7120
37/43 Kampala Road
Kampala
Uganda

Anna Santa Drale

Bank of Uganda - Research Department ( email )

P.O. Box 7120
37/43 Kampala Road
Kampala
Uganda

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