Governance and Upgrading in Coffee Value Chain: The Case of Dale Woreda, Sidama Zone, Southern Ethiopia
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Date
2019-11
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Addis ababa University
Abstract
he body of literature and research related to the value chain analysis has increased in recent
years. This research attempted to analyze value chain of coffee in Dale Woreda (Southern
Ethiopia) by using the value chain approach, focusing on constraints and opportunities of
upgrading and governance structure along the chain. In order to attain the above objectives, the
study followed a mixed-method approach which combined qualitative and quantitative analysis.
The respondents such as farmers, cooperatives, processors, and exporters were selected by
multistage sampling techniques. The study involved; survey with 214 coffee producers, in-depth
interviews with 28 actors and stakeholders and focus group discussions with two farmers groups,
each comprising of five people. Both primary and secondary sources of data were used for the
study. Descriptive statistics and thematic analysis were used for analyzing the result. Value chain
actors; producers, cooperatives, processors, exporters, importers and supporters/facilitators were
identified with their role and function. The study revealed that local producers, in their interaction
with buyers have the possibility to acquire new skills, knowledge and incentive. In addition, the
implementation and compliance with standards provide opportunities for farmers to invest on their
product. Focusing on this kind of interaction, the study indicates that local producers were
engaged in upgrading to improve their benefits from the sector. The majority of the producers in
the study area upgraded their product and internal processes. A limited number of producers
engaged in functional and channel upgrading. Local institutions and producers’ cooperatives have
created programs to help small-scale coffee farmers adapt to the changes in the global
marketplace and assist them in increasing their competitiveness but they have limited capacity.
The result shows that the governance structure in the coffee market is often buyer-driven, mostly
governed by international buyers. There is also a range of mechanisms of coordination at play in
the chain between different stakeholders and segments of the chain. Captive forms of governance
in this case study have fostered some degree of product and process upgrading. Therefore, a policy
aimed to accelerate the coffee sector in the area could be successful if these opportunities and
constraints are taken into consideration to improve the information flow through horizontal and
vertical coordination of actors.
Keywords: Governance, value chain analysis, Coffee farmers
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Keywords
Governance, value chain analysis, Coffee farmers