The role of rural producer organizations in enhancing market participation of smallholder farmers in Uganda : enabling and disabling factors

Abstract

The study investigates the factors influencing the effectiveness of second-tier rural producer organizations (RPOs) in linking their members to output markets in Uganda. The percentage of farmers who sold some of their produce through the RPO was used as a proxy for effectiveness. Ordinary least squares (OLS) regression analysis indicated that RPO effectiveness was positively related to the size of a RPO and democratic leadership. On the other hand, the proportion of RPO leaders with leadership training, enforcement of internal control practices, bulking distance and size of executive committee had a significant negative effect on the effectiveness of such organizations. It was concluded that improving the effectiveness of RPOs required the (i) use of numerous sub-committee instead of many all-member meetings and smaller executive committees; (ii) dedication, respect and commitment by leaders of RPOs when imparting skills learnt in order to boost members’ morale; (iii) devising reward systems for leaders or putting in place stringent rules, such as leadership codes, to guide leader behaviour so as to prevent conflict of interest and possible elite capture; and (iv) policies guiding Savings and Credit Cooperatives (SACCOs) lending conditions be reviewed to match rural producers’ economic status and seasonality of enterprises.