Does linking farmers to markets work? Evidence from the World Food Programme’s Purchase for Progress satellite collection points initiative in Uganda

Abstract

Using a non-experimental cross-sectional dataset of 471 households, we evaluate the impacts of satellite collection points (SCPs) under the Purchase for Progress (P4P) initiative implemented by the World Food Programme (WFP) on storage decisions and crop income from maize sales among smallholder farmers in Uganda. We find strong evidence that storage users had significantly more maize sales due to significantly larger inventories and received higher maize prices than the nonstorage users. This evidence is robust across the two econometric estimators, consisting of the ordinary least squares (OLS) and two-stage instrumental variable approaches. These results demonstrate that the SCPs are successful in linking farmers to markets and result in improved welfare of the users, suggesting that they should be scaled up and scaled out as a poverty-reducing development intervention and strategy in rural areas with storable agricultural products.