Factors Influencing the Choices of Coffee Marketing Channels by Smallholder Farmers in Jimma Zone, Oromia Region, Southwestern Ethiopia

Coffee is one of the most important agricultural commodities with significant contributions to the growth and well-functioning of Ethiopia’s economy, and the social stability of the country (Alemseged, 2012). Despite its importance, the performance of the sector has been unsatisfactory due to various production- and marketing-related factors. This study was thus conducted with the objective of identifying the factors influencing the choices of marketing channels for selling dry-processed or red coffee cherries. Cross-sectional survey data were collected from 377 sample farmers selected from Gomma and Limmu Kossa districts of Jimma zone in southwestern Ethiopia through a multistage stratified simple random sampling technique. The data were collected from October 2019 to January 2020 after pretesting the questionnaire. Descriptive statistics and a multivariate probit (MVP) econometric model were used to analyse the data. The results obtained from separate MVP regression model analyses reveal that sex, coffee land size and productivity, average dry-processed coffee selling price, frequency of visits by the DA, cooperative membership, access to credit, training, off- and non-farm income sources, and distance to cooperatives’ and private traders’ marketing centers influenced the choices of local consumers, traders or cooperatives for selling dry-processed or red coffee cherries. The findings suggest that farmers should be provided with coffee production- and productivity-enhancing technologies that could increase yield and productivity and the marketed supply of coffee. Moreover, farmers should be provided with information regarding the importance of cooperatives and training on ways to improve coffee production and productivity. Finally, cooperatives should incorporate credit schemes at peak coffee production and during the marketing season so that members prefer to supply their coffee to the cooperatives and earn better coffee income at the end.