Extending the theory of storage to a perishable commodity in an underdeveloped market : a case of Uganda

Abstract

The challenges limiting agricultural development in underdeveloped markets relate directly to inappropriate storage facilities. These challenges are not unique to Uganda where majority smallholder maize farmers use traditional storage. Inappropriate storage leads to losses in quantity and quality, which negatively affect food and income security. The study is premised on the theory of storage advanced by Kaldor in 1939. Its aims were: to examine the role of household characteristics on choice of storage type used; to assess whether the cost of storage can be used to identify the optimal storage type; to evaluate the theory of storage extension to underdeveloped market; and to explore smallholder maize farmers’ perception of using storage types as a strategy for building a business framework. The study was conducted in the eastern region of Uganda using concurrent mixed method research. The study was conducted in the eastern region of Uganda using concurrent mixed method research and a multistage cluster sampling method. Districts and subcounties were selected based on highest, medium and low maize production. Simple random sampling was used to select a sample of 270 smallholder maize farmers, maintaining equal distribution across districts. Respondents for the focus group discussion and key informant interviews were purposively selected. A questionnaire was used to collect quantitative data. Focus group discussion and interview guides were used to collect qualitative data at community level. The findings show a significant relationship between choice of storage types used and the household characteristics; district (location) p-value = 0.000, gender p-value= 0.009, acquisition of the storage type p-value= 0.000, and seasonal use of storage type p-value= 0.032 at a confidence level of p<0.05. The cost of storage cannot be used to identify the optimal storage method. Household characteristics and cost of storage affected smallholder maize farmers’ share of the maize marketing margin. Most participants supported using storage as a strategy to increase their share of the maize marketing margin. The study shows how storage can be used as a strategy to increase the share of the maize marketing margin for smallholders and that with adjustments for context the theory of storage can be extended to underdeveloped markets. Findings close the knowledge gap concerning the theory of storage and its extension to underdeveloped markets, and underlines that storage strategies need to be improved to ensure improved grain quality and quantity to support the business framework. The findings provide information about storage challenges useful to smallholder maize farmers, researchers and policy-makers.