Abstract

Diversification has been argued to be the future of small farms and more so in developing countries given its benefits to mitigating against risk, increase economic and social benefits. This study was built on an earlier study by Mpiira et al. (2021). 247 respondents were interviewed using pre-tested and semi-structured questionnaires in three districts of Central Uganda: Kiboga, Nakaseke and Sembabule. Using a cost-benefit analysis, net benefits from the adoption of a particular combination of GBTL technology were calculated. An Ordinary Least Squares (OLS) model was used to determine factors that influence the net benefits accrued by cluster of farms. Findings show that the more diversified farm cluster 2 earns more from bananas and legume fodder while cluster 1 earns more from coffee. Cluster 2 farms earn about 4.3 million shillings annually from bananas and 2.3 million from coffee while cluster 1 farms earn an average of 1.6 million shillings from banana and 3 million shillings from coffee. The final net benefits are influenced by education level, gender and land control as well as level of coffee integration within the coffee-banana intercrop. We find significant differences between farm clusters in terms of diversification intensities by enterprise combinations and benefits. The findings point to the need for tailor-made enterprise combinations that fit the gender, space and location.

Key words: Farm diversity, profitability, technology, Uganda.