Impact of Off-farm Income on Agricultural Technology Adoption Intensity and Productivity : Evidence from Rural Maize Farmers in Uganda

This study analyzed the impact of off-farm earnings on the intensity of adoption of improved maize varieties and the productivity of maize farming in Uganda in the years 2005/06 and 2009/10. Summary statistics show significantly higher adoption intensity and expenditure on purchased inputs among households with off-farm income relative to their counterparts without off-farm income. Households with off-farm income allocated about 15.9 percent of their land to improved maize varieties, and spent UShs 32,048 annually on input purchases compared to an adoption intensity of 13.8 percent of land allocated to improved maize and input expenditure of UShs 12,270 for those without off-farm income. The results of the random effects Tobit model show a positive and significant association between off-farm income and the proportion of land planted with improved maize varieties. We, however, find farm households without off-farm work to be more efficient maize producers than those with off-farm income. The mean level of the technical efficiency score was 0.43 for those without off-farm work compared to the 0.39 for an average farmer with off-farm income. In addition, the cumulative distribution function (CDF) for the farmers without off-farm income stochastically dominated the CDF for farmers with off-farm income. This suggests that off-farm opportunities, while inducing increased use of improved seed, due to competition for labor time, may undermine the productivity gains from adoption of improved seed. The findings from this study support diversification of household income as a strategy for increasing capital availability to increase uptake of the modern purchased inputs