Effect of market production on rural household food consumption: evidence from Uganda

Food access is an important element of food security that has since long been a major concern of rural households. One intervention to improve food access has been increased promotion of market production in the hope that households will get increased income and access to food through the market rather than through self-sufficiency characteristic of subsistence production. We examine the effect of market production on household food consumption using a case of rice in western Uganda, where rice is largely a cash crop. Our analysis is based on propensity score matching and instrumental variable approach using survey data collected from 1137 rural households. We find evidence of negative significant effects of market production on calorie consumption; More commercialized households are more likely to consume less than the required calories per adult equivalent per day. This implies that the substitution effects due to higher shadow prices of food outweigh the income effects of additional crop sales. On the contrary, we find positive significant effects on household dietary diversity. We suggest a mixed approach combining policies targeted at market production as well as production for own consumption, and nutrition sensitization.