Factors Affecting Coffee Supply Market In Guto Gida Woreda Of Eatsern Wollega Zone. An Econometrics Analysis

Ethiopia is associated with being the origin of coffee. Coffee is one of the most important cash crops in Ethiopia. It is Africa's leading producer and exporter of Arabica coffee. Coffee sustains the livelihoods for over 15 million and provides important income for casual labor and for many additional poor rural people. It contributes 25%-30% of the country's foreign exchange earnings. The coffee sub-sector contributes about 12% of the agricultural output and employs 25% of total labor force. Nearly half of Ethiopia coffee production is locally consumed. Ethiopians are heavy coffee drinkers, ranked as one of the largest coffee consumers in sub Saharan Africa. Identifying the factors determining the volume of coffee supply by farmer's at farm level in the study area is the aim of the paper. The study is carried through both primary sources with special reference to the focus groups discussion and brainstorming session and secondary sources. A three stage sampling technique was employed to select the sampling unit. 150 sample households have been selected from the study area. The multivariate regression model is used which assumes that the dependent variable which is defined as the amount of coffee market supply depends on the explanatory variables such as age of household head, education of the household head in years of schooling, sex of household head, proportion of land allocated to coffee, income of household, availability of credit, extension services relating to coffee-production, expected future price, amount of coffee produced, tropical livestock unit, product increment methodology, family size, weather condition, and assess of road. Among the factors considered to determine supply of coffee or determinants of coffee supply are. Age of household lead, family size access to credit, amount of coffee produced expected future prices product increment technology that are positively affecting coffee market supply and Sex of household, education level of household head, extension service, access to road and fertility of land allocated for coffee production are negatively affecting coffee market supply.