| dc.description.abstract | Coffee is one of the major Rwandese exports and therefore a major foreign exchange earner. It
plays a great role in the Rwandese economy. In 2012, its contribution stood at 0.857% of total
GDP. But still its production remains volatile. Even though the sector has been having such
volatility, few studies have been done in Rwanda on coffee supply, but none of them attempted
to explain how coffee supply responds to price and non price factors. This study seeks to find out
how coffee supply responds to these factors. The study uses secondary time series data for the
period 1990-2012 and the Nerlove’s partial adjustment model.
The results of the study indicate that coffee price and rainfall have a positive impact on coffee
output whereas the Tutsi genocide and tea price have a negative impact on coffee output. The
short run price elasticity of coffee is 0.1559 whereas long run price elasticity of coffee is 0.0394
implying that pricing policy can be employed as a strategy to enhance coffee production in
Rwanda.
Based on the findings, this study recommends that the government of Rwanda should take
serious measures in developing agricultural technology, improving meteorology services, unity
and reconciliation, training of the coffee farmers, price incentives and strengthening data
recording in order to increase coffee production. | en_US |
