DETERMINANTS OF FARMERS’ PARTICIPATION IN COFFEE PRODUCTION AND MARKETING (THE CASE OF OYDA WOREDA IN GAMMOGOFA ZONE SOUTHERN NATIONS NATIONALITIES AND PEOPLES REGIONAL STATE)

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.