Crop diversification decisions : the case of vanilla in Uganda

This article provides a micro-level foundation for the analysis of crop diversification decisions in a semi-subsistence banana farming community in Uganda. A two-crop agricultural household model is developed to show that credit rationing and crop price movements influence vanilla adoption decisions. The analysis is based on survey data from 70 households. Household welfare improves by 16%, without raising food security concerns, when vanilla is grown. Results imply that the benefits of functioning credit markets, and crop quality improvement strategies that lift farm-gate vanilla prices, are important to consider when developing pro-poor growth strategies at the farm level.