Impact of the liberalization of coffee marketing rules on the performance of coffee industry in Kenya : a survey of coffee farmers' co-operative socities in Mathira Division, Nyeri District
Coffee has for a long time been among the leading foreign exchange earners for the country. However the coffee industry declined in performance in the 1990s hence didn't realize high incomes to the farmers, high prices for coffee sales and production outputs were low. The government in the year 2006, attempted to rejuvenate the sector through the introduction of direct marketing, dubbed the "second window'", where farmers could sell their coffee directly to buyers among other aspects of liberalization. This study therefore embarked to investigate the impact of this new liberal marketing rule to the performance of coffee industry in Kenya. The main objectives being the impact of the new liberalization of marketing rules on coffee output, farmers incomes, coffee prices and also make policy recommendation to the regulating authorities on coffee marketing in Kenya. The study made a descriptive survey of the Coffee Farmers Cooperative Societies in Mathira Division of Nyeri East District, Central Province as the study location to make the findings. The target population was the managers and management committee officials of the coffee farmers' cooperative societies in the Division. A sample size of 36 managers out of a population of 60 and 27 management officials out of a population of 81 was targeted. From the sample size of 63 out of a population of 141, 60 respondents were interviewed. Questionnaires were used as the main data collection instruments for both groups of the respondents. Data was collected for two years before and after the new liberal marketing rules. The data analysis was done with the assistance of the SPSS software. The outcome is presented in the form of tables of frequencies, percentages, statistical charts such as pie charts and bar graphs. Regression and correlation analysis was used to analyze the relationship between the new liberal marketing rules and the coffee prices, outputs and farmers income. The finding reveals that since the coming into effect of the new liberal marketing rules, coffee is fetching a higher price per kilogram than before. The price changed from, Ksh 19 in 2004 to Ksh 34 in 2008.Coffee farmers income also increased from a percentage payout of 65.6% in 2004 to 83%'s in the year 2005. Coffee output though the average for the two time periods reflects an increase, but a substantial reduction in production for 2008 from the 2007 level. This was attributed to change in weather patterns and settlement on previously coffee farms due to population pressures. However the quality of coffee is generally higher due to introduction of new or improved varieties and high price incentives on high quality coffee. The study concluded in chapter five with some policy recommendations to the regulatory authorities such as the need to reduce the number of marketing agents, ensuring that marketing agents were competent and reduced taxation in the coffee industry. Infrastructural development, strict regulation of the coffee sector and increased international coffee marketing were the other recommendations made by the respondents
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