Coffee marketing efficiency in the post-liberalization era in Karagwe district, Tanzania
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Date
2014
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Publisher
Sokoine University of Agriculture
Abstract
This study explores the impact of trade liberalization policies in Tanzania with special
focus on the marketing efficiency of Robusta coffee in Karagwe district. A cross-sectional
research design as well as purposive, simple random and snow ball sampling techniques
were employed. Data were collected from 120 smallholder coffee farmers, 12 village
traders and 11 key informants using semi-structured questionnaire, group discussions and
checklists respectively. Qualitative analytical techniques included descriptive statistics
such as cross tabulations, means and percentages as well as Quantitative methods such as
marketing margins, conventional (simplified) marketing efficiency method and Regression
analysis. The study found that farmers sell coffee through main three marketing channels
namely; Rural Primary Societies (RPSs) 35%, Private Coffee Buyers (PCBs) 46.7% and
Village buyers 18.3%. Farmers selling coffee to Village buyers recorded less marketing
margins (90.37%) compared to those selling coffee to PCBs (93.20%) and RPSs (92.90%).
The Multinomial Logit Model was employed to determine the factors influencing farmers’
choice for marketing channel using SPSS software version 16. The model results show
that three factors; distance, price and age significantly influenced the farmer’s marketing
channel choice at p< 0.05 and p< 0.10 levels of significance. The market concentration
ratio (CR) for the four and five largest buyers of 87.5% and 90.3% and the Herfindahl-
Hirschman Index (HHI) of 0.29; asymmetric market information and bureaucratic
licensing system impede fair competition in the industry. The study concludes that coffee
marketing system in the study area is inefficient thus; it recommends the reviewing of the
existing bureaucratic licensing system, dissemination of coffee marketing information
through radios and mobile phones, restructuring of cooperative societies, introduction of
formal credit facilities to provide favourable credit to farmers and establishment of strict
by-laws and regulations against the use of local unstandardized measurement units.
Description
Dissertation
Keywords
Coffee, Robusta, Karagwe district, Tanzania