Analysis of coffee marketing system in Arumeru district of Tanzania

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Sokoine University of Agriculture


This study assesses the capacity of co-operatives in reducing the transaction costs in Arumeru district, Arusha region. The objectives were to describe the coffee marketing system in the study area in particular, to assess the perception of farmers toward co-operatives, to asses the factors for adopting coffee marketing channels and to compare transaction costs between users and non users of co-operatives and to recommend the appropriate marketing system. Data were collected using structured questionnaire, which was supplemented by field observations. A total of 279 farmers from five villages namely Nkoaranga, Poli, Imbaseni, Ndatu and Ngyani were interviewed. Snowball sampling technique was adopted to get the respondents. Descriptive statistics, logistic regression analyses and independent sample t-test were used to analyse the data. Results of the study showed that 50% of respondents have negative perception on co-operatives and 48% have positive perception while 2% do not know if co-operatives are beneficial or not. Level of education was found to be the most important factor that influences farmers’ perception. In logistic regression analysis only information on market price and traders’ trustworthy was found to influence adoption of various market channels significantly. From independent sample t-test, the results revealed that the transaction costs incurred by members and non-members of co-operatives do not differ significantly. Based on the findings of the study, the following recommendations were put forward: Policies formulated need monitoring and evaluation to insure good performance of coffee production and marketing. Further reform and changes need to be done in co-operative organizational and institutional to take advantage of the challenges and opportunities opened up by globalization and technological changes. Lastly, the new research on analysis and comparison of transaction costs between co-operative and private traders is recommended.


Masters Dissertation


Coffee marketing system, Arumeru district, Tanzania