Value chain and marketing margins of cassava: An assessment of cassava marketing in northern Uganda

Abstract

Cassava is one of the emerging market oriented agricultural commodities with potential to contribute to improved livelihoods of smallholder farmers in Uganda. Besides being a food crop, cassava is attracting more attention as a commercial commodity. The rise in the commercial orientation of cassava is due to the fact that cassava products have important industrial applications for plywood, textile, bakery, pharmaceutical, paper, alcohol, and food industries. However, this commercial potential of cassava has not been fully realized in Uganda, with cassava being largely produced and consumed domestically. There is need to understand the factors hindering the commercialization of cassava and its products if it’s full potential are to be realized. This paper assessed the market potentials of cassava and its products in northern Uganda with the aim of improving its commercialization. Data was collected through a quantitative survey of 110 cassava producers and traders in Lira District between 2012 and 2013. Analysis was done using SPSS and Excel. Results show that fresh tubers dominated the marketed products by both producers and retailers (50 %). Among the three cassava marketing channels, the producer – retailer channel had the highest gross margins; sold as a bag at the farm gate price of $ 12, the retailer realizes a markup price of $ 8 per bag. Selling cassava as a “heap” on the street was even more valuable as the price is pegged at an average 50% above the farm gate price. Processing of cassava increased the gross margins by at least 40% compared to fresh tubers. Producers realized gross margins that were 112% above those for fresh tubers, suggesting that producers can benefit from processing cassava into chips. Wholesalers had advantage only when they marketed cassava flour (US$ 0.32) second to retailers at US$0.56. These findings suggest that cassava has good market potential to improve the incomes and livelihoods of households in northern Uganda. This, however, can only be realized if cassava can be processed into value added products such as starch and high quality cassava flour which have high commercial values.

Key words: Cassava, cassava products, value chain, marketing  margin, northern Uganda