Economic Affairs

The present study conducted a value chain assessment to estimate the cost incurred at each stage of the value chain, along with the margins made and the price realized, for pure Arabica and 80:20 Arabica coffee: chicory blend in Chikkamagaluru and Hassan districts of Karnataka. Descriptive statistics, value chain framework, price spread analysis were used to analyze the data. Results revealed that the highest value addition took place at curers and roasters level (downstream actors) and accordingly margins made by these down steam actors were higher than the coffee growers (upstream actors). It was observed that coffee value chains in Chikkamagaluru and Hassan districts are fragmented and largely uncoordinated, with lack of innovative upgrading strategies among the majority of small coffee growers due to lack of capital. This suggest that formation of Farmer Producers Organizations would enable the small coffee growers to take up value addition activities through infrastructure sharing thereby higher value realization through economies of scale. Likewise, it is critical to bring efficiencies and transparency in buying and selling activities across the coffee value chain by implementing blockchain based marketplace.