Profitability of sugarcane out grower business:

Abstract

Commercial sugarcane farming has been practiced in Lugazi Municipality nearly fifty years mainly for sugar production. This monocultural land use is cultivated majorly by the small scale farmers and a limited number of large scale farmers as this research has revealed due to the land constraint affecting the production of the crop. This study was conducted to analyze the profitability of sugarcane out grower business. Data was collected through a survey with a guide of questionnaires, in the profitability study the gross profits of the small scale sugarcane out growers in Lugazi was calculated, the factors that influenced the out growers to continue in business, the benefits of cultivating sugarcane under the contract and non-contract out grower schemes, challenges and solutions to the problems faced by the sugarcane out growers in the different schemes were all investigated. The results in the study report positive profits results of 2,885,524.684 million per acre for the contract out growers and 2,175,176.875 million per acre for the independent out growers in the sugarcane out grower business which have been a great contributor to the life advancement of the small scale out growers in Lugazi Municipality and therefore l recommend the out growers to continue in the business with much efforts to expand the business as the study has reported that the more the acres of cultivation the increase in the profits and due to the fact that profits are likely to increase in the second season since some costs are incurred only in the first season of planting.