Analyzing Determinants of Farmers’ Choice of Coffee Marketing Channels in Bugisu Sub-region. (A Case Study of Mbale District, Uganda)

Abstract

In Bugisu sub-region, coffee production, particularly Arabica coffee, plays a crucial role in sustaining rural economies, especially in high-altitude areas of Mt. Elgon. Despite the region's favorable agro ecological conditions and its prominence in global coffee markets, smallholder coffee farmers face persistent challenges, including limited access to markets, weak infrastructure, and price instability. These challenges undermine their capacity to derive optimal benefits from coffee farming, prompting the need for research-driven policy interventions to improve marketing efficiency and farmer incomes. This study investigated the determinants influencing smallholder farmers’ choice of coffee marketing channels in Mbale District, Uganda. It aimed to (i) assess the influence of socio-demographic characteristics, (ii) examine the role of institutional factors, and (iii) analyze farm-level characteristics that shape farmers’ marketing channel decisions. A structured survey and quantitative analysis approach were employed, with multinomial logistic regression used to estimate the likelihood of farmers choosing among three marketing channels: cooperatives (reference category), private traders, and exporters. The results show that socio-demographic variables such as; education, age, household income, farming experience, off-farm income, and primary occupation significantly affect marketing channel choices. For instance, education level significantly increased the likelihood of marketing through private traders (p = .004) and exporters (p = .002), while farming experience influenced both options (p = .002 and p = .034, respectively). Household income and age were particularly significant in the exporter category. Institutional factors also emerged as strong predictors. Access to credit significantly increased the probability of using private traders (p = .023) and exporters (p = .012). Access to extension services (p = .024), market information (p = .002), and market proximity were also significant determinants. Cooperative membership, notably, influenced the likelihood of switching to other marketing channels. At the farm level, descriptive analysis indicated that 35.94% of farmers sold to exporters, 33.07% to cooperatives, and 30.99% to private traders. Regression results showed that; farm size, yield, location, investment level, and use of production technology were all statistically significant in determining channel choice, especially favouring exporters and cooperatives over private traders. The study concludes that an intricate interplay of socio-demographic, institutional, and farm-level factors shapes the choice of coffee marketing channels among smallholder farmers. These insights underscore the importance of strengthening institutional support—particularly access to credit, extension services, and market information—and promoting cooperative membership and exporter linkages for better-resourced and technically advanced farmers. Policy interventions targeting these areas can enhance equitable access to high-value markets and improve the livelihoods of coffee-dependent communities in Uganda and across East Africa.