Transaction costs and poor asset endowments appear to be major impediments to small scale agricultural development in Uganda. Reasons for the lack of commercialisation of agriculture, and the barriers to increasing the value of banana crop sales and banana production are the focus of this paper. Using agricultural household economics theory, an empirical analysis based on the Heckman model is unertaken. Data collected through a primary farm survey in three different regions of Uganda form the crux of the analysis. Preliminary findings indicate that transaction costs and production constraints are hindering development, thereby hampering poverty alleviation efforts.