Impact of improved coffee variety adoption on enhancing annual income of smallholder farmers in North Western Ethiopia

Abstract

Coffee is originated in Ethiopia and becomes main exported commodity, source of foreign currency to Ethiopian economy. Despite its importance, Ethiopia coffee production system characterized as traditional production, lower productivity, poor disseminating system of improved coffee variety and little is known about its impact on enhancing annual income. Therefore, this paper aim to investigate the determinant of improved coffee varieties as well its impact on enhancing annual income of smallholder farmers in north western Ethiopia. Total 114 sample households (34 Improved and 80 local coffee producers) were taken through random and systematic sampling method. Descriptive and propensity score matching methods were employed to analyze the data. The result of descriptive statistics revealed that Adopters of improved coffee varieties were allocated large land for coffee, taken training on coffee variety, construct different soil and water conservation methods, access to financial service and more educated than non-adopters. The result of logit regression showed that household sex and land allocated for coffee production was the main factors determined the improved coffee varieties adoption. The PSM result revealed that improved coffee variety adoption showed statistically significance and positive effect on improving annual income of adopters over the non-adopters and brought 44.63% of increment on their annual income. This research suggests that improved coffee variety adoption is a means of income increment and securing economic welfare of smallholder farmers. Therefore, governmental authorities and NGOs should be focused on the expanding and disseminating of these improved coffee varieties over the coffee pro agro-ecologies of the countries.

Keywords: Coffee, Adoption, Impact, Improved coffee variety, Annual income, Logit, PSM

DOI: 10.7176/JNSR/17-1-02

Publication date: February 28^th 2025