Over the last decade Uganda has recorded impressive rates of poverty reduction, experiencing one of
the fastest reductions in extreme poverty (as measured using the international extreme poverty line of
US$1.90) seen in sub-Saharan Africa. This paper examines the drivers of this change using nationally
representative panel data for 2,356 Ugandan households visited four times between 2005/6 and
2011/12. We find substantial growth in agricultural incomes particularly among poorer households.
However, we also find that many of the gains in agricultural income growth came about as a result of
good fortune, peace and improved efficiency in food markets, rather than technological change or
profound changes in the nature of agricultural production. As a result, although the overall progress
during this period was good, there were years in which average income growth was negative. This was
particularly the case in the poorer and more vulnerable Northern and Eastern regions, and as a result
their overall income growth was also slower. We argue that without a fundamental change in the nature
of agricultural production in Uganda, progress in reducing poverty will be vulnerable and widening
spatial inequality will continue to be observed.