The Effect of Trade and Exchange Rate Policies on Price Incentives for the Production of Coffee, Cotton and Tea in Uganda: an Omega Free-Trade Equilibrium Approach

Abstract

The objective of this study is to determine the extent to which the trade and exchange rate policies in Uganda have affected price incentives for the production of coffee, cotton and tea. These crops were the major agricultural exports from Uganda for the period 1970-92, and were a major source of foreign exchange, income and employment. Both the direct effects of trade and agricultural pricing policy interventions (such as the coffee export taxes) and the indirect effects of economywide trade and macroeconomic policies (which influence the real exchange rate) on the agricultural price incentives, are examined.