This research employed an explanatory case study to compare supplier production capabilities for enhancing productivity gains between Uganda commercial forestry and sugarcane sector value chains. Key study results indicated that only 18% of the sugarcane farmers achieved the desired industry productivity output of at least 100 t/ha from their fields, with majority (82%) of the cane growers producing below expected industry productivity output. In the forestry sector, 41.3% of the farmers achieved the desired industry performance targets, with 58.7% of the growers performing below expected performance targets. The major buyers' supplier development behaviour as seen in the diffusion of knowledge, skills and appropriate technology along vertical and horizontal collaborative value chain relationships, explains this paradox. Millers in the sugarcane sector used contractors to diffuse knowledge and skills, which weakened the supplier production capabilities. In the forestry sector, with the support of development partner agencies, productivity was higher due to effective diffusion of knowledge, skills and appropriate technology to primary producers. This finding strongly points to the need to implement deliberate supplier development strategies by the development partner agencies and governments, if productivity gains are to be improved within the agri-business value chains in developing countries.