Market Access and Quality Upgrading: Evidence from a Randomised Experiment in the Coffee Sector in Uganda

The agriculture sector in sub-Saharan Africa exhibits significant indicators of misallocation. In the same area, there are large productive farms producing and selling quality crops through regional or global value chains, and unproductive smallholders producing and selling a low-quality version of the same crops in informal markets. Given the size of the smallholder sector, this misallocation can help explain why average agricultural productivity has been so low and grown slowly for several decades and why rural poverty remains high. With the belief that quality drives value and value in turn drives investment and productivity, quality upgrading and market linkage are a key step in closing this gap in productivity and returns. The researchers' previous work identified a key demand-side constraint to this process, a missing output market for quality crops. Lifting this constraint helped smallholders in the maize sector increase profits.

Building on this work, this project examines complementarities between the same demand-side constraint and a broader set of supply-side interventions, including inputs such as fertiliser, seedlings for gradual replanting, pest-management, and an agricultural extension service. To assess their impact, these inputs will gradually, and in a random order, be offered to farmers at subsidised prices. The primary outcome variables (at the household level) include yield, acres, harvest value, profit, input use, and post-harvest activities. Given women perform most of the farming activities, both the supply- and demand-side interventions will be designed in a way to ensure their involvement.

Uganda has more coffee farmers than any other country. While coffee is not the only viable cash crop for Ugandan farmers, options diminish with distance from Kampala and other major towns. The Ugandan government, which derives about 18% of export earnings from coffee, has a strong interest in growing the sector. The project links directly to the Coffee Roadmap which was launched by the Ugandan government in 2017 (with the aim of increasing its coffee production target to 20 million bags annually by 2025). The project will also help demonstrate whether the results of the previous study of the maize sector can be generalised to a sector in which quality is more easily verifiable, average output for smallholder farms differs significantly, and high-quality value chains (including export markets) already well established.


Tessa Bold

Stockholm University

Jakob Svensson

Stockholm University