Impacts of price and productivity changes on banana-growing households in Uganda

This article compares the effects of changing market prices and farm productivity on the welfare of banana-growing households in the Ntungamo district of Uganda. A heterogeneous-agent model is applied via a series of mathematical optimization problems, to simulate production and consumption responses of 70 farm households surveyed in 2006. Results show that a given increase in productivity has a greater impact on poverty alleviation than that same increase in market prices. Despite the effects of productivity gains being comparable across different types of household groups, price improvements primarily benefit the incomes of households who are involved in rural producer organizations, who are located closer to markets, and who sell at the market.