Assessment of the profitability of groundnut production among smallholder farmers in Bukanga sub-county, Luuka district

Abstract

In Uganda, agriculture is a country’s backbone and main source of income for rural people. The agriculture sector contributes to 23% of the country’s GDP and employs over 70% of Uganda’s population and feeds the raising population. Bukanga Sub County is rural state Sub County located in Luuka district Busoga region. The area is made up of farmers who cover the biggest percentage of the population growing various crops like groundnuts, potatoes, sugarcane, soya bean, Maize, coffee and many other crops. The farmers take agriculture as their major economic activity and depend on it for their livelihood but majority of these farmers are poor, food insecure and are of a low income status which signifies that the agriculture they are doing is not profitable. The aim of the study was to assess the profitability of groundnut production in Bukanga sub county Luuka district because groundnut is one of the commonly grown crops and has a ready market with higher prices. With guidance from the technical people and the population size not known the researcher was able to employ the formula by Easterby-Smith (2013) and used a sample size of 73 respondents who were basically groundnuts farmers and all accepted to participate in the survey. Data was analyzed using descriptive statics, multiple regression analysis and gross margin analysis. The results showed that mostly females participate in groundnuts production than males; most of the respondents have attained education, the other shows that groundnut production is profitable in Bukanga Sub County Luuka District because it has a positive gross margin of UGX 32,180, a net farm income of -UGX8,904.50 and a return on every UGX invested of -0.02. The negative returns were reported to result from some major factors like much rainfall, much drought, low soil fertility, pest and diseases and high prices of seed. Groundnuts production can be a profitable business in Bukanga Sub County if the farmers are taught better agronomic practices, subsidies are given to farmers on the inputs used in production and improving the extension network which improves the information flow to and from farmers to the agricultural officials.