Smallholders’ Market Outlet Choice under Different Performance Level of Primary Coffee Marketing Cooperatives: The Case of Jimma Zone, Southwestern Ethiopia

Abstract

Access to market in the form of different market outlet for coffee farmers is crucial to exploiting the potential of coffee production to contribute to increased cash income of rural households. Identifying factors affecting market outlet choice is therefore important. People form cooperatives to do something better than they could do individually or through a non-cooperative form of business. Forming a cooperative will not automatically solve business problems faced by individual households. This is because of cooperatives are subject to the same economic forces, legal restrictions and international relations that other business face. Choice experiments are highly structured method of data generation relying on carefully designed tasks or experiments to reveal the factors that influence choice. The choice experiment design development is described in terms of its attributes and the level each attribute takes. Survey data collected using choice experiment questionnaires produced by %choiceRun and the final efficiency design was produced using the %MktEx and %%choiceff SAS macros. The study shows that using a random parameter logit model. The availability of alternative market outlet attributes, ways of payment, distance from market, pre-transaction contract, and relationship, members of cooperative leader and fee of entrance could change the farmers attitude and there is different what they practice with they preferred.

Keywords: cooperative, market, attribute, multinomial logit