The Consequences of Globally Traded Primary Commodity Products Liberalization: The Case of Subsistence Farmers in Uganda

The aim of this research is to find out the mechanisms through which global trade of primary commodity products and local government’s agricultural policies interact with the coping strategies of subsistence farmers. For that purpose, I focus on the Ugandan typical cash crop, coffee and cotton, both of which are produced almost entirely for export, not for domestic consumption.

During 1990s, the government of Uganda, like many other aid-recipients, had no choice but to take the structural adjustment measures recommended by World Bank if she is to continue pursuing national development with the help of western donors. Coffee and cotton were two of the typical industries needed to be liberalized: State monopoly on export was dismantled and the money these products can fetch was directly linked to the fluctuating world market prices.

Subsistence farmers, if they are to survive in the society where both the market availability of food and the paid employment opportunities are limited, need to optimize the allocation of their resources to cash crops and food crops. Given the loss of guaranteed fixed returns from the investment in cash crops after liberalization, farmers are now expected to produce cash crops if and only if other possibilities of cash income are not available or less efficient. These individual strategic behaviors may or may not contradict with the national development plan of the government, which seeks to boost the production volumes of coffee and cotton because they have been accounting for significant part of national revenue from export.

Using the statistical records as well as interviews to local subsistence farmers, this study tries to examine whether or not actual farmers behaviors are strategic, and to what extent the macro-level consequences of these micro-level behaviors are consistent with the government sector goals as the bases for entire national development.