Market chain analysis of smallholder coffee producers in debub ari district of south omo zone, SNNPR, Ethiopia

Y Alemayehu

doi:10.3329/ijarit.v11i2.57256

Abstract

This study mainly aimed at analyzing market chain analysis of coffee in the Debub Ari District. The descriptive and S-C-P model was used. Both primary and secondary data were collected from the study area. The multi-stage sampling technique employed for this study. A total of 194 coffee producer household heads have been randomly selected and interviewed with the help of pre-tested structured questionnaire. The focus group discussion and key informants interviews were conducted to supplement the formal data. The results of S-C-P model indicated that the four firms concentration ratio (CR4) result in the study area was found to be tight oligopolistic for both red and dry coffee which accounts 89.2 and 80.0%, respectively. About 72% of price setting was done by buyers, 27% negotiation and 1% by the producers. There are seven market channels, which have been identified in the study area. The computed marketing margin among different actors and channels indicated that the total gross marketing margin (TGMM) of coffee is high in channel I, II, III whereas the producers marketing margin (GMMp) was highest in channel VII. Therefore, the intervention is needed to improve coffee marketing chain through promoting cooperatives, infrastructural development and timely market information for efficient marketing system in the study area. Int. J. Agril. Res. Innov. Tech. 11(2): 61-68, Dec 2021

Highlights

Coffee is the major export crop in the Ethiopian economy (Petit, 2007)
The results of S-C-P model indicated that the four firms concentration ratio (CR4) result in the study area was found to be tight oligopolistic for both red and dry coffee which accounts 89.2 and 80.0%, respectively
The market concentration ratio for the red as well as dry coffee in the study area were found to be 89.2% and 80.0%, respectively which indicates that there is strong or tight oligopoly that has been observed with regard to the coffee marketing in the study area. This indicates that there is imperfect and inefficient coffee marketing system in the study area, which made the farmers to get un-proportional benefit from their coffee during coffee marketing. This result calls the intervention, which is needed in order to adjust the inefficient coffee marketing system in the study area

Summary

Introduction

Coffee is the major export crop in the Ethiopian economy (Petit, 2007). Coffee in today’s time is one of the most valuable sources of export for the East African nations such as Ethiopia, Uganda, Kenya, and Tanzania. Coffee has accounted for an average of 60% of the total export earnings for the past five decades (Zekarias et al, 2012). In the SNNPR, the total area covered by smallholder coffee producers is 217,080.29 ha which gives the total production of 1,353,831.54 Qt. In Debub Ari District the total area covered by coffee production is 9341 ha. Of the total about 1,040,950 kg of coffee have been marketed to the ECX (Debub Ari Woreda Agriculture Office, 2019)

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Results

Conclusion