PROFIT EFFICIENCY OF RED ONIONS PRODUCTION IN SIRONKO DISTRICT
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Date
2023
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Gulu University
Abstract
Onion (Allium cepa L.) is one of the most consumed food spices globally due to associated benefits making it a crop with unique market opportunities in agribusiness. Despite Uganda having a favorable climate for i:ed onion production, its production remains very low compared to the world average production. The aim of this study was therefore to analyze the profit efficiency of red onions production in Sironko district of Eastern Uganda.
A structured questionnaire was employed to collect data from 216 red onion producers. Analysis was done using descriptive statistics, gross margin, and the Cobb-Douglas type stochastic profit frontier function model.
The study results showed that red creole and Afri seed were the only varieties of red onions that were grown in the study area. Onion farmers had an average farming experience of 15 years, had completed primary school. Married males dominated onion production. Additionally, onion production was characterized by low access to credit, extension services, and farmers' group membership. The Gross Margin and Return On Investment revealed that red onion production was profitable in Sironko district. An average of Ugandan shillings 884,500 for Afri seed producers and Ugandan shillings 1, 724,414 for red creole were obtained per acre of land. Factors that significantly influenced profit efficiency of red onion production include: seed cost (p<0.01), fertilizer cost (p<0.1 ), pest control cost (p<0.05), weeding cost (p<O. l ), farming experience (p<0.1 ), extension
services (p<0.1) and selling price (p<O. l ).
The study recommends that to improve the profit efficiency in onion production, the focus should be on the provision of tailored agricultural extension services and affordable credit facilities to the farmers. Further, appropriate policy instruments and agri-business strategies are needed to spur onion profitability.
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Keywords
Profit efficiency, Stochastic Frontier Approach, Descriptive Analysis, red onions, Uganda