Economic analysis of farmers’ preferences for coffee variety attributes: lessons for on-farm conservation and variety adoption in Ethiopia

Abstract

The knowledge to-date recaps Coffea arabica to have originated in Ethiopia and its genetic diversity in the country is proved to be high. However, this diversity is threatened due to policy, institutional and market failures. Despite a tremendous attention to salvage this loss through on-farm conservation, there is no adequate contextual research done as to how this strategy can be harmonized with farmers’ livelihood strategies and how policy can face the potential trade-off with modern technology adoption.

Understanding farmers’ preferences for variety attributes is important in the implementation of sensible on-farm conservation and variety adoption strategies since it offers policy directions to harmonize trade-offs and capitalize on synergies. To this end, the paper studies farmers’ preferences for distinct coffee variety attributes – yield, yield stability, marketability and environmental adaptability. Using a utility maximization framework and drawing on Lancaster’s characteristic model, farmers’ preferences for variety attributes are derived as an outcome of their livelihood decisions. Following this, a multinomial logit model is estimated. The data come from 266 coffee growing farmers in southwestern Ethiopia. The results have shown various factors inducing or deterring farmers’ preferences for the studied variety attributes. Based on the empirical results, the paper derives policy implications on on-farm conservation and improved coffee variety adoption in Ethiopia.