Abstract
This study analyses profitability with respect to value added in the coffee value chain in the North West Region of Cameroon. As objective, this study examined the economic relations at different stages of the coffee value chain. Thus, the study analysed the prices, costs, margins and profit sharing at different stages in the coffee value chain in the North West Region of Cameroon. Purposive sampling technique was used to select 40 respondents from two divisions (Mezam and Bui) who formed the study sample. Analysis employed the Cost–Return and Benefit–Cost technique to measure profitability at selected stages (coffee producers/farmers, coffee processors, coffee exporters and coffee retailers) in the value chain. Results showed that the cost of production of dry parchment, green bean, powder coffee and brewed coffee was Franc Financial Community of Africa - FCFA103,027/ha, FCFA 2,933.7/kg, FCFA 1,043.12/kg and FCFA 7,335/kg respectively with Net Profits of FCFA 15,192, CFA 1,566.3, FCFA 528.88 and FCFA 4,665 respectively. Furthermore, Benefit-Cost ratio analysis revealed that the coffee value chain is a profitable sector with Benefit-Cost values of 1.1, 1.5, 1.5 and 1.6 respectively for coffee producers/farmers, coffee processors, coffee exporters and coffee retailers. Though profitable, the study uncovered that coffee producer who apparently at the beginning of the value chain doing most of the job received the least benefit when compared with other actors. This study provided evidence that retailers were most benefited in the value chain compared to coffee producers, processors and coffee exporters. The study recommends that for a profitable coffee business within the study area, the government, coffee cooperatives and all the actors along the value chain should work in close collaboration.
Highlights
Introduction and ProblemAgricultural value chains are seemingly gaining more attention across the world, apparently due to the need to minimize post-harvest losses, increase food availability and promote the profit motive behind agribusiness activities
Profitability analysis was done at the four major levels of the coffee value chain, namely, coffee producer, coffee processor, coffee exporter and coffee retailer
This study focused on doing a profitability analysis of four major actors in the coffee value chain in the North West Region of Cameroon
Summary
Introduction and ProblemAgricultural value chains are seemingly gaining more attention across the world, apparently due to the need to minimize post-harvest losses, increase food availability and promote the profit motive behind agribusiness activities. A developing economy with agriculture being the backbone activity has embraced activities with the aim of ensuring value added in agriculture. In the western highlands of Cameroon, Coffea Arabica is widely grown. Coffee production across the world is a big agro-industrial activity, estimated to be a source of livelihood to over 25million small holder farmers, with daily consumption estimated at 2.25 billion cups (Ponte, 2002). This implies that if well exploited, stakeholders in the coffee value chain can have their livelihoods improved especially those in the developing world
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