Does crop diversification outside a monocrop-based irrigation scheme affect profitability of the monocrop? Insights from Doho rice irrigation scheme in eastern Uganda

Abstract

Monocrop irrigation schemes is an example of a farming system which provides incentives for specialization on the target crop.•However, this does not necessarily stop farmers from diversifying outside such farming systems.•In this paper, we assess the impact of diversification outside a mono-crop irrigation scheme on the performance of the mono-crop.•Findings suggest that increasing performance of an irrigation scheme monocrop may require intentional efforts to encourage targeted crop diversification outside a mono-crop system. Monocrop irrigation schemes in developing countries are usually characterised by participant farmers diversifying crop production outside the scheme. However, there is a lack of empirical evidence on how diversifying outside a mono-crop scheme affects the performance of the monocrop. Using a random sample of 385 smallholder farmers from the Doho rice irrigation scheme, this study examines the effects of crop diversification outside the scheme by participants on the profitability of the target monocrop, rice in this case. Results showed that only 6% of the farmers relied on the monocrop, with rest involved in the cultivation of an additional or more crops. The level of crop-diversification depended on the share of land in the scheme to total land accessed, gender of farmer, access to extension services and information, and the cost of irrigation services. These smallholder rice farmers earned about Uganda Shillings 3425,000 per acre (United States Dollars 951) annually from rice production. The instrumental variable regression results from a two stage least square analysis show that crop diversification had a positive impact on rice profitability. We conclude that in mono-crop irrigation schemes, outside crop diversification enables farmers tap into enterprise- combination synergies with positive benefits for farm profitability. This calls for policy and development interventions to support smallholder farmers operating in mono crop irrigation schemes to innovate and diversify farming activities.