:Coffee Value Chain Analysis in Bedele District, BunoBedele Zone of Oromia Regional state, Ethiopia

Abstract

This study aims at analyzing the value chain of coffee in Bedele district of BunoBedele Zone in Oromia Region with specific objectives of identifying coffee value chain actors and their respective functions, analyzing marketing margin of actor along coffee value chain and analyzing factors affecting marketed supply of coffee . Multistage sampling technique was used to select representative producers and data were collected from both primary and secondary sources. Primary data were collected from 150 producers, 17 traders, 2 primary cooperative and 1 cooperative union while secondary data were collected from district offices, published and unpublished documents. Descriptive statistics, value chain analysis and econometric model were used to analyze the data using STATA version 14 software. The major actors of coffee value chain in the study area were input suppliers, coffee producers, collectors, suppliers, cooperatives and union. These actors have role in coffee production, processing and marketing. Three main coffee marketing channels were identified in the study area. Margin analysis for value chain actors indicated that about 63 .4% of gross marketing margin in coffee value chain goes to coffee traders and producers earn about 36.6% of gross marketing margin. The result indicated that producers incur the highest cost for dry cherry coffee type about 50 % of the total cost incurred by actors in the chain and gained 40.9% net margins. Total gross marketing margin is highest in channel I which was 42% and lowest in channel III which was 32%. The result of multiple regression model revealed that coffee farming experience, education, land size and member to cooperative, affected marketed surplus of coffee positively and significantly whereas distance from the nearest market affected negatively and significantly. Recommendations drawn from the study findings include the need to improve the input supply system, strengthening farmerscooperatives, improving producers’ knowledge, training farmers, improving productivity and volume sales of coffee, constructing infrastructure, strengthening the linkage among coffee value chain actors and strengthening supportive institutions