Factors influencing the intensity of market participation of coffee processors in Uganda

Abstract

PurposeThis paper aims to examine the level of market participation of coffee processors and the factors that influence their intensity of market participation for processed coffee in Uganda.Design/methodology/approachThis paper studies dry processing of coffee using survey data from purposively selected sample of 120 coffee processors in Uganda. The study utilizes descriptive analysis and Tobit regression approach.FindingsThis paper finds the level of participation of coffee processors in the sale of processed coffee at 77.8 percent in Uganda. The findings demonstrate that the intensity of market participation of coffee processors is positively and significantly influenced by Kiboko sales revenue, location, experience of the processor, number of visits by Uganda Coffee Development Authority and processor mill capacity. However, credit access and non-farm income negatively and significantly deterred their intensity of market participation.Research limitations/implicationsThe paper shows that there is more potential for coffee processors to increase their intensity of market participation given their current capacity for coffee processing. Therefore, insights on production efficiency and market orientation in coffee value chains would be an issue for future studies.Social implicationsThe study has a direct implication on the economy through supportive institutions and increased investment in the value addition of coffee to meet the increasing regional and global demand for processed coffee.Originality/valueThis paper bridges the gap in literature on commercialization of coffee processing, allows to determine processors' level of market participation and with application of Tobit regression approach to quantify the effects of the factors that influence the intensity of market participation in coffee value chains in Uganda.