Certification and Credibility: Do Seed Certification Systems in Uganda Help Signal Quality to Farmers?

Abstract

The value of purchased seed is a product of its underlying genetic information. However, farmers purchasing seed face a classic information asymmetry problem, as varietal identity is not directly observable. In this article we investigate the effectiveness of two certification systems in addressing this issue in the context of Uganda: the formal certification system (predominantly private sector) and the FAO's quality declared system (certification for seed produced mainly by farmers' groups). Using a large, nationally representative panel dataset spanning thirteen growing seasons, and controlling for time‐invariant household and plot‐level unobservables, we find that cultivating purchased quality declared improved seed results in measurable yield increases relative to saved seed. Surprisingly, however, certified improved seed is shown to provide no yield benefits over seed saved from previous seasons, despite its higher cost. Our findings suggest that input heterogeneity and information asymmetry in seed markets may be key constraints to the successful diffusion of improved maize varieties in Uganda, and that the formal seed certification system may not have provided an adequate signal of seed quality to farmers during the time period covered by the panel.