Village saving loan association membership and commercialization among smallholder maize farmers in northern Uganda

Abstract

Abstract Smallholder maize farmers are typically engaged in subsistence production with low input use, low yields, and insufficient profits for on-farm investment. Despite the role of Village Savings and Loan Associations (VSLAs) in enhancing financial inclusion and promoting agricultural commercialization, little is known about the factors driving smallholder farmers' participation in these associations and how this affects maize commercialization, particularly in northern Uganda. This study sought to examine VLSA membership and commercialization among smallholder maize farmers in northern Uganda. This study specifically examined the factors influencing maize farmers' participation in VSLAs and assessed the factors influencing the level of maize commercialization among VSLA members and non-members. Data were collected from 420 randomly selected smallholder maize farmers and were analyzed using binary logistic and Tobit regression models. Results revealed that 52% of the farmers participated in VSLA while non-participants had maize commercialization levels of 61%. Further, male gender, age, household size, fresh maize form, hire labor, extension service, market information, phone information, access to credit, and land ownership significantly influenced maize farmers’ participation in VSLAs. Factors influencing the level of maize commercialization among VSLA member farmers include age, educational status, spot market, hire labor, land ownership, farm income, and distance to the output market. The study recommends that the Ministry of Agriculture, Animal Industry, and Fisheries (MAAIF) should implement policies focused on improving access to financial services, promoting gender-sensitive training programs, and investing in rural infrastructure to reduce market access barriers, which will foster maize commercialization and economic development among smallholder farmers.