Analysis of Smallholder Farmers Participation in Production and Marketing of Coffee; The Case of Coffee in Limmu Kossa District, Jimma Zone of Oromia Regional State

Abstract

Agriculture in Ethiopia remains the key sector that provides lion share 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 Limmu kossa woreda. A cross-sectional quantitative study was conducted in a sampled population by taking 228 sample sizes using systematic sampling method, out of these selected households 170 were male headed, and the remaining 58 were female headed. According to the study 135 households were coffee producers and the rest 93 households were non- producers. The mean age of sampled household heads was 46.5 years; the maximum and minimum age for household heads were 81 and 18. Almost all of the respondents own their own land; the farm size of respondents varies from 0.1 to 9 hectare and the average farm size was found to be 2.41 hectare. 67% of coffee producers used traditional coffee seed and only 33% of coffee producers used improved coffee seed. On average, coffee producers generated income birr 17629.17 from sale of coffee in year 2019/2020.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, active family labor, access to credit, availability of family food, and traveling time to the nearest market significantly explain the decision to produce coffee. On other hand, only number of working family members, and land size determine the level of coffee production participation considerably. Furthermore, the study verified that in addition to the quantity of coffee marketed, market price, selling time, travelling time from the nearest market and market information 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.