Abstract:
Agriculture in Ethiopia remains the key sector that provides lion share of foreign
exchange earnings and the largest labor force employer. Out of total agricultural output
about 95% was covered by smallholder agriculture sub-sector. However, a number of
factors limit farmers from participating in coffee production and marketing. The main
objective of this paper was to identify household specific factors determining coffee
production and marketing in OydaWoreda. A cross-sectional quantitative study was
conducted in a sampled population by taking 214 sample sizes using systematic sampling
method. The tools used in the study were structured interview, focus group discussion and
observation. To examine the determinants of farmers’ decision to participate in the
production activity and level of participation, Double hurdle model were used. In the first
stage of double hurdle model, probit regression was used to examine farmers’ decision to
participate in production. In the second stage of double hurdle model truncated
regression were used to analyze level of participation and income generation from sell of
coffee. The study indicated that farm size, family labor, number of oxen owned, access to
credit, availability of family food, and distance to extension service significantly explain
the decision to produce coffee. On other hand, the number of oxen owned, farmers
experience on coffee production, number of working family members, and access to credit
service determine the level of coffee production participation considerably. Furthermore,
the study verified that in addition to the quantity of coffee marketed, market price, selling
channels, selling time, travelling time from the nearest market and market price
significantly determines the level of income earned from coffee sale. The implication is
that livelihood improvement could be assisted through better participation of farmers in
coffee production and marketing in the area.
