Socio-economic factors affecting farmers participation in vertical integration of the coffee value chain in Huye district, Rwanda
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Coffee farming in Rwanda is an important sector that contributes significantly to the economy in terms of employment and income, especially for the smallholder coffee farmers in rural areas. In order to improve coffee production in terms of quality and quantity, farmers are encouraged to form and join cooperatives so that they can increase their vertical integration within the coffee value chain. Despite this strategy, level of participation of farmers in cooperatives is still low (21%) and slow. The objectives of this study were; (1) to determine the social and economic factors influencing farmers’ decision to participate in coffee cooperatives; (2) to investigate the socio-economic factors influencing the intensity of coffee production (coffee growing) and (3) to identify and analyse agronomic challenges that smallholder farmers’ face in production of coffee. The study was conducted in Huye District. A stratified sampling technique was used to select two strata with sample size of 230 comprising of 170 and 60 members and non-members of coffee cooperatives, respectively. The study relied on both primary and secondary data. The results revealed that farmers who joined cooperatives had yield of coffee equivalent to 759 kgs/ha compared to 635 kgs/ha for members and non-members respectively and an annual average farm net income corresponding to 223,000 RwFs and 193,000 RwFs for members and non-members respectively. Probit regression results revealed that off-farm income, access to credit, keeping farm records and trust positively influences farmers’ decision to participate in coffee cooperatives while female headed household, higher education level and large farm size found negatively influenced farmers’ decision to participate in coffee cooperatives. For Tobit regression, results showed that higher educational level, off-farm income and experiences in farming positively influenced the intensity of coffee production while female headed household and farm under other crops were found to negatively influence the coffee intensity. Results regarding agronomic problems showed that 19.4% and 13.3% found lacking mulch both members and non-members respectively while 13.5% members and 18.3% non-members showed to lack fertilizers. Based on the above results the study recommends support in the development of farmers’ cooperatives as a channel of being vertically integrated by the farmers thus increase production and income from their coffee. There is a need to intercrop coffee trees with annual crops which give mulches since lack of mulch has shown to be a major problem for coffee production. Also, the government should allow the farmers’ cooperatives to import fertilizers with tax exemption since the farmers delay to apply them or do not use them because of their costs or delayed distribution.