Analysis of Coffee Marketing Cost and Margins in South West, Ethiopia

Abstract

The aims of this study were to identifying the existing coffee marketing channel, and estimating coffee marketing cost and margins. A two stage random sampling techniques was used to select 15 PAs and 150 coffee growers from the two major coffee producing woredas of the zone, while a purposive sampling technique was employed to  select 40 traders and seven processors. Both primary and secondary data were used for this study. Descriptive statistics were employed to analyze the data. The result of marketing costs, margin and benefit analysis imply that coffee collectors incurred the lowest cost which was 7.97 birr per 17 kg. Coffee producers bear the highest cost followed by wholesalers which was 104.98 birr and 48.67 birr per 17, kg respectively. The average coffee wholesaler retained significant annual total net benefit than producers and coffee collectors. The estimated annual net benefits of a typical coffee producer, collector and wholesaler were birr 3879.88, 1708.28, and 390257.06, respectively. This implies that coffee trading is highly profitable at the wholesale level. The producers’ share as a percentage of wholesale prices is low as compared to farmers in other regions of the country.

Keywords: Coffee, margins, coffee marketing channel, producers, traders