Determinants of coffee production and its marketing: Case of Abe Dongoro District, Oromia Regional State, Ethiopia

Coffee, Ethiopia's largest export crop is the backbone of the Ethiopian economy. However, Ethiopia has not yet fully exploited its position as the producer of some of the best coffees in the world. Currently, Ethiopian export coffee performance has decline. Due to this, the study analyzed the determinants of coffee production and marketing in the study area. The objectives of this study were to examine the determinants of coffee production and marketing of smallholders in Abe Dongoro District. Accordingly, multi stage sampling procedure was employed to select the sample households. Four parent associations were randomly selected by using random sampling method and finally, 225 sample respondents were selected from the sampling frame based on probability proportional to size (PPS).Cobb-Douglas production function was employed to analyze the determinants of coffee production, while logit model analyzed the determinants of coffee marketing. Cobb-Douglas production function result showed that active family labor, cultivated land size, compost, pesticide and pruning of coffee plant were positive and significantly affect coffee production and age of coffee plant negative and significantly affect coffee production. The results of logistic regression indicated that education level of household heads, access of training, access of information positive and significantly affect the participation of coffee marketing while transportation costs negative and significantly affect coffee marketing. Moreover, policy consideration has to be given by government to those significant variables which have a potential impact in determining farmer's production and marketing of coffee. Keywords: Production, Marketing, Logit Model, Cobb-Douglas Production Function.