Structure, Conduct and Performance of Coffee Market in West Guji Zone Oromia Region Ethiopia

Abstract

Background: In West Guji zone, coffee is cash crop and source of income for the people. However number of challenges hindered development of market sector. Therefore this study was initiated to identify market chain actors and their roles and analyze structure conduct performance of market. Methods: Primary and secondary data sources were used. Primary data were collected from 152 producers and traders by semi structured questionnaire. Secondary data were collected from, published and unpublished sources. Descriptive and structure conduct performance were used to analyze the data. Result: Market chain actors are producers, cooperatives, union, collectors, wholesalers, retailers, Ethiopian commodity exchange, exporters and consumers. Nine coffee market channels were identified. There is a strong oligopoly markets with average value 65.11%. Capital shortage, administrative and security problems, price fluctuation, un-licensed traders, unfair taxation and lack of reliable price information were barriers of market entry. Highest total gross marketing margin was 85.47% and lowest was 27.9%. Highest producers share was 100% and lowest 14.53%. Highest gross profit was Birr 122.7/kg by wholesalers while lowest Birr 4.7/kg by collectors. It is a need to strengthen institutions, infrastructural, yield increasing technologies and post-harvest management practices in the study area to boost production and market efficiency.