Abstract:

This paper used the Uganda National Household Survey (UNHS) dataset of 2005/06 to examine the
productivity of improved inputs used by smallholder maize farmers in Uganda. Yield and gross profit
functions were estimated with the stochastic frontier model. Results revealed a significant effect
improved inputs use on yield but not gross profit. Farmers who used commercial improved seed with
fertiliser obtained superior yield but lower gross profit compared to farmers who planted recycled
seed (of improved variety) without fertiliser. Furthermore, if the opportunity cost of own land and
labour inputs in maize production were imputed, overall, farmers made economic losses. Based on the
prevailing farmers’ production technology and market conditions, maize cultivation in the range of 2-
3 ha was found to give optimum profit while cultivation under 1 ha or above 4 ha led to economic
losses. The key finding of this paper is that use of improved inputs by Ugandan farmers in maize
cultivation yields sub-optimal profits due to higher marginal cost compared to marginal revenue from
increased output associated with improved inputs use. And, overall, maize farming is of no economic benefit -other than for food.