Co-Operative Members’ Decisions On Coffee Marketing Channels And Factors Influencing Their Choices In Rombo District, Tanzania

ABSTRACT

Although Agricultural Marketing Co-operative Societies (AMCOS) play a major role in coffee marketing, not all members seem to use them effectively since some of them are using private traders as their coffee marketing channel. The question now is what influences their choices on which channel to use on coffee marketing. The main objective of this study was to analyze co-operative members’ decisions on coffee marketing channels and factors influencing their choices in Rombo district. Specifically the study aimed at describing the coffee marketing system and evaluates the existing potentials of AMCOS, assessing the factors that influence co-operative member’s choice of coffee marketing channel and comparing the transaction costs incurred by the user and non-user of AMCOS in coffee marketing. Two-stage sampling procedure was followed to select four AMCOS and a total of 200 sample respondents who were the co-operatives members. Both primary and secondary data were collected. The study noted that, only 16.5% of the members trade with private buyers. By using SWOT analysis the study found that cooperatives are internally strong, while the external analysis shows the co-operatives current strategies do not respond well on the use of the external opportunities. Logistic regression analysis indicated that only four variables that is, access to inputs, payment system, access to market information and trust were significant at 0.05 probability level, this means the aforementioned factors are the ones which influence co-operative member’s choice of coffee marketing channel. From the independent sample t test it has been noted that, AMCOS as a marketing channel has higher transaction costs than private traders. The study concluded that, co-operatives do not perform well in coffee marketing compared to private traders although members have more faith to co-operatives than to private traders. Therefore the study recommends that, there is a need to strengthen organizational and institutional capacity of AMCOS.