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Risk-taking, risk-sharing and underinvestment in agriculture in eastern Uganda – Policy lessons

Resource type: Policy brief

Published: 2016

Author: Arjan Verschoor, Ben D'Exelle, Borja Perez-Viana, Joshua Balungira, Paul Clist

Food insecurity and harvest failure are common in eastern Uganda, with farmers often reporting that they struggle to meet their needs. Opportunities for raising productivity are available – growing cash crops, or investing in fertiliser and other agricultural outputs for example – but they rely on a larger cash outlay than that required for conventional agriculture. This can act as a deterrent to risk-averse farmers, who typically only invest what they can afford to lose.

This policy brief summarises key recommendations garnered from DEGRP project A behavioural economic analysis of agricultural investment decisions in Uganda. From February 2012 to February 2015, the project combined economic experiments, surveys and several stages of stakeholder consultation with the aim of understanding the conditions under which farmers would prudently take advantage of agricultural investment opportunities.

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