Factors Affecting Coffee Market Supply of Smallholder Farm Household: The Case of Gewata District Kaffa Zone, Southwest Ethiopia

Ethiopia has a broad genetic diversity among its coffee varieties. Despite high coffee production potential of the district, the market and marketing system of the area is generally dominated by conventional system of marketing and producers are forced to sale directly for conventional transaction root that do not provide premium price for their coffee produce and results low market margins. Both primary and secondary data were used for this study. Descriptive statistics like: percentage, frequency, mean and standard deviation and econometric model which is stages least square (2SLS) were used to analyze the data. The result of econometric analysis of 2SLS regression shows that four variables (which are education level of household head, membership to coffee cooperative, transport ownership and quantity of coffee produced) positively and significantly affected market supply of coffee. However, distance to the nearest market affected it market supply of coffee negatively and significantly. Therefore, policy implication drawn from the findings aimed at strengthening farmers coffee cooperative and enhancing the financial capacity of cooperative with functional collection center, improving accessibility of transport services and developing infrastructure,improving farmers'knowledge through adult education as well as their experience sharing with other coffee producing farmers, improving productivity through strengthening supportive institutions(extension service provider).