Upgrading Opportunities and Challenges for Small Coffee Producersin Sidama Region of Ethiopia

Abstract

This study attempted to examine upgrading opportunities and challenges for small coffee producers. The study followed a mixed-method approach, which combined qualitative and quantitative analysis. The study involved a survey of 214 coffee producers, in-depth interviews with several actors and stakeholders, and focus group discussions with two farmer groups. The study identified a growing demand for organic/specialty coffee, availability of farmer groups, promising rules and regulations as some of the opportunities for small coffee producers to diversify upgrading options. However, lack of investment capital, lower levels of farmers’ educational background, lack of continuous training, poor infrastructure and irrigation facilities, the high cost of machinery and processing materials, lack of technical knowledge to produce input and adopt new technologies were the major constraints for upgrading. The majority of producers have participated in product and process upgrading. A limited number of coffee growers have engaged in functional and channel upgrading. Vertical and horizontal coordination can play an important role in upgrading the chain to help farmers compete in wider markets. Therefore, a policy aimed to accelerate the coffee sector in the area could be successful if the opportunities and constraints are taken into consideration through horizontal and vertical coordination of actors.