Determinants of Market Outlet Choice of Coffee Producing Farmers in Lalo Assabi District, West Wollege Zone, Ethiopia: An Econometric Approach

Abstract

This study examines the major determinants of market outlet choice of coffee producing farmers in Lalo Assabi district of West Wollega zone, Ethiopia with the specific objectives of exploring the general characteristics and livelihood activities; and identifying major factors affecting coffee market outlet choice. A Random sample of 141 coffee producers was selected for interview based on the appropriate sample size determination. Both descriptive and inferential statistical methods were employed for data analysis. For the marketing of coffee, 11.3%, 51.8% and 36.9% of the respondents mainly chose end consumer, private trader and cooperative outlets, respectively. The result of a multinomial logistic model showed that the choice of end consumer outlet is positively and significantly affected by access to transportation facilities, access to price information and access to credit compared to private trader outlet, whereas the quantity of coffee sold and access to extension services negatively affected the main choice of end consumer outlet. Similarly, the choice of cooperative outlet is positively and significantly affected by distance to the market, access to transportation facilities, access to price information and access to training compared to private trader outlet. Therefore, these variables require special attention if farmers’ margins from coffee marketing are to be increased.