Choice of Institutional Arrangements for Rice Marketing in Northern Uganda: An Agency or a Constrained Choice?

Rice is an important commodity in Northern Uganda. The commodity is traded under institutional arrangements of contract, personalised transaction and spot market. However, how the choices of these arrangements are made is largely unknown. And yet such information would guide interventions in rice marketing in the region and facilitate comparison of choices of institutional arrangements in other areas with the one in this region, uniquely characterised by post-conflict and cross-border trade dynamics. Using a multinomial probit model and based on a stratified sample size of 151 respondents drawn from five sub counties in Northern Uganda, the effects of effective price, difficulty of accessing price information, interlocking transactions, trust, membership of farming groups and socio-economic status of rice producers on the choice of institutional arrangement were assessed. Effective price, interlocking transaction and membership of farming groups appear to encourage transactions under contractual arrangement, but trust and being a rich peasant discourage it. While trust and being a rich peasant tend to encourage personalised transactions, effective price, interlocking transaction and group membership discourage it. Group membership seems to facilitate spot market transactions, while difficulty in accessing price information, interlocking transaction and trust limit it.