Analysis Of Determinants Of Coffee Value Chain Performance In Ethiopia

Coffee is one of the most popular crop worldwide. The production and consumption of coffee in Ethiopia has a socio-economic importance and it is both local and export market destined produce. It has a major contribution to the economic development in Gross Domestic Production and Foreign exchange earnings. This study was conducted in South Western part of Ethiopia, major coffee growing woredas, selected as a sample to describe, analyze and explain the factors affecting coffee value chain performance in Ethiopia and to find possible ways enhancing the value chain's performance. Towards this end, this descriptive and explanatory study utilized a combination of multistage, 1st level sampling or area sampling and random sampling techniques to select 13 sample woredas from the total of 35 woredas from selected coffee growing regions. Primary data was collected by distributing a total of 288 questionnaires and collecting 208 questionnaires with a 76 % response rate. Secondary data was gathered for Forex earning from export and GDP contribution from 2007 – 2016. The study employed quantitative analysis through questioner and secondary data. Findings of the study identified that the existing agronomic practices of coffee, government policy and regulation in place for the subsector and the role of financial institutions are contributing to the performance of coffee value chain in terms of Gross Domestic Production and Foreign exchange earnings. Finally, constraints in efficiency of production of coffee, the role of government policy and regulation in creating favorable marketing environment to value chain actors, support of financial institutions in encouraging coffee related investments, services provided by market institutions (Ethiopian Commodity Exchange) and the role of non-government organizations in alleviating obstacles in the value chain performance are areas that need greater attention in order to robust coffee value chain performance in Ethiopia