The economics of intensifying East African highland banana systems in Uganda

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Nearly two-thirds of the bananas produced in Uganda are transported over long distances to reach their markets, a situation that offers limited scope for the sustainable intensification of these faraway banana systems, according to a study by the International Institute of Tropical Agriculture.

In the southern and western regions of Uganda, where most of the country’s East African highland bananas are grown, more than 30% of the cultivated land is occupied by bananas. But what used to be a food crop has increasingly become a cash crop to satisfy the growing urban markets. As a consequence, more and more nutrients leave the farm and end up in the capital Kampala.

Researchers have been pleading for an increased use of mineral fertilizers to compensate the nutrient loss, especially potassium, not met by the use of organic fertilizers and leguminous crops. Indeed, the region is known for having one the lowest use of mineral fertilizer in the world, partly because of the high prices of fertilizers. But the same factor that makes fertilizers expensive, transport costs, also makes their use unprofitable for farmers who are far away from their markets, according to a USAID-funded study led by the International Institute for Tropical Agriculture.

The study examined the impact on yields of using fertilizer and mulch, and the benefits that would accrue to farmers in Central, South, Southwest and East Uganda. The results show that even though the annual average yield increase in Central Uganda was not the highest (8 t/ha compared to 10 t/ha in the South), the average marginal rate of return (MRR) of using fertilizer and mulch was higher (5.8 in Central Uganda compared to 0.1 in the most remote corner of the Southwest), in part because of a higher farm gate bunch price (0.17 USD/kg compared to 0.07 USD/kg in the Southwest).

According to the study, the farmers who stand to benefit the most are those close to their market. Beyond 160 km, investing in fertilizers becomes riskier as chances to lose money increase. Although food prices have increased since the study, the price of fertilizers has almost doubled since 2007, from an average of 0.60 USD/kg to almost 1.00 USD/kg. The fertilizer threshold is now probably moving to within 100 km of the Kampala market. “The economics are against farmers the further away from the capital you go”, says Lydia Waregi, the main author of the study. She also notes, however, that the MRR was calculated based on the effect of applying the general-purpose NPK fertilizer in all the plots. “Investing in the right type of fertilizer would reduce cost and increase output. We observed that nutrient deficiencies vary strongly between regions. The results of our analyses are available to those who would like to target their fertilizer application.”

”Nevertheless”, adds her thesis supervisor Piet van Asten, “with the Ugandan population projected to triple from 30 to 90 million by 2050, the country may have to re-organize its agricultural landscape if it wants to sustainably intensify banana production through the use of fertilizers and tissue-culture plants”.

The production of bulky and perishable produce like bananas may have to move closer to the country’s main urban centers, while remote areas focus on high-value, cheaper-to-transport products that can be stored more easily.