FARMERS PERCEPTION OF COFFEE PRICE

FLUNCTUATION IN BULERA SUBCOUNTY MITYANA

DISTRICT

BY
NABAKOOZA NOELINE
REG NO:19/U/4235/PS
SUPERVISED BY:DR LWASA STEPHEN
 OUTLINE
• Introduction
• Problem statement
• Objectives
• Hypothesis
• Methodology
• Results and discussions
• Conclusion
• Recommendations
 INTRODUCTION
• Background
• Coffee is one of the most important cash
crops grown across the world and major
source of export earnings (Amrouk., 2018)

• Due to increasing demand globally, people

have continued to grow coffee (Defries et
al., 2010;

• Coffee is one of the commodities that are

affected by price fluctuation due to the
shock in the market fundamentals such as
labor and production costs (Wood et
al.,2012).
 PROBLEM STATEMENT
• Coffee is a very delicate commodity that has many
substitute products on the market, hence leading to
increase in product pricing due to price volatility
meaning that consumers of the product will switch to
its substitute product like cocoa (Obere et al.,2013).

• There are many questions among coffee farmers on

how to manage the changing coffee prices, the way
they perceive them and to mitigate them such that
they don’t incur losses.
 OBJECTIVES
Main objective

To analyze farmer perception of coffee price fluctuation among farmers in Bulera sub-

county Mityana district

Specific objectives

1) To determine how farmers are challenged by changes in coffee prices.

2) To find out practices adopted by farmers to mitigate the effects of changing coffee

prices in Mityana district.

3) To estimate factors that influence the price received by coffee farmers in Bulera

sub-county.
 HYPOTHESIS
• Experience and location of the farm had a
significant influence on coffee price received
by farmers.
 METHODOLOGY
Sturdy area: Bulera sub county
• Research design
• Cross sectional survey

Data types
• Primary data collected through questionnaires and interviews
• Secondary data

Sturdy population

Coffee farmers in Bulera sub county

Sample and sampling techniques; 65 respondents randomly selected

 Objective 1; used descriptive statistics mainly frequency and percentages.

 Objective 2;used descriptive statistics ,frequency and percentages.

 Objective 3: used linear regression.

 METHODOLOGY CONTINUED
•The dependent variable was price of coffee (output per acre) .
•Y=Βo+B1X1+B2X2+B3X3+B4X4+B5X5……………...+ e
•Where Y= New price
•Bo = constant
•B1-B10 = parameters estimated
•X1 = Age of the respondent (in years)
•X4 =Actual monthly income (in UGX)
•X5 = Distance from to the sub county agricultural office (in kilometers)
•X6 = Gender of the respondent (1=Male, 0= Female)
•X7 = Total house hold (people)
•X8 = Dummy for marriage (1=YES, 0=NO)
•X9 = Marketing coffee (As a group, As individual)
•X10 = Access to information (1 = Yes, 0 =No)
•e = An error term that captures other variables that are missed out in the model specifications.
• 
• 
 RESULTS AND DISCUSSIONS
Socio demographic characteristics
Mean age 46 years
Married 85%
Distance from agricultural office 3.4KM
Total house hold 6 people
Actual monthly income 300000 UGX
Coffee farm size 3.4 Acres
Total yield 2527KGS
Familiar with price fluctuation 100%
Access to marketing information 35%

Effect of price fluctuation 98.5%

Other activities besides farming 41%
Land ownership 63%
Mimimum selling price (dry and processed) 2300 and 6500UGX
 RESULTS
Production challenges
Production challenges N Percent
Poor harvesting methods 65 11.5
Decline in soil fertility 65 11.3
Pest and diseases 65 11.1
Limited land 65 11.1
High production cost especially at weeding and 65 11.1
harvesting stage
Poor storage facilities resulting into several post- 65 11.1
harvest losses
Labor shortage 65 11.1
Limited capital 64 10.9
Weather problem 63 10.8
Total 585 100.00
 RESULTS
Marketing challenges

Marketing challenges faced by farmers N Percent

Limited market and long distance to 100 20.3
market place
Low prices 98 19.9
Price fluctuation 91 18.5
Limited marketing information 73 14.8
High transportation cost incurred 65 13.2
Delay and breach of contract by buyers 65 13.2
Total 492 100.0
 RESULTS
Marketing coffee

As a group
46% As an individual
54%
 RESULTS
Causes of price fluctuation
Response Frequency Percent
Harvesting of immature green coffee 18 27.7

Changes in dollar price 9 13.8

Poor post-harvest handling 16 24.6
Poor government policy 10 15.4
Un-ethical behaviors among traders and 9 13.8
many traders on ground

Change in prices of other goods 1 1.5

Poor weather conditions 2 3.1

Total 65 100.0
 RESULTS
Effects of price fluctuation

Effects N Percent

Losses 53 63.9

poor planning and

budgeting 29 34.9

cheating farmers by traders 1 1.2

Total 83 100
 RESULTS
Going through periods of price fluctuation

Engage in other income

generating activities Hoarding
32% 42%

Sell of to meet urgent needs

26%
Going through periods of fluctuation
other crops grown

35.0%

30.0% 29.1%

25.0% 24.2%

21.5%

20.0%

15.0%
13.0%

10.0%
8.1%

5.0%

1.8%
0.9% 0.9%
0.4%
0.0%
coffee beans maize banana cassava potatoes irish G.nuts vanilla
 REGRESSION RESULTS
Variables Beta t p Std. Error
(Constant) -0.206 0.838 4728.876
Gender 0.014 0.094 0.926 689.033
Marriage (1=Yes, 0=No) 0.04 0.264 0.793 1040.458
distance from the major road -0.224 -1.677 0.1 492.807
how much land do you access -0.206 -1.314 0.195 55.991
how many times do you weed 0.043 0.296 0.768 289.597
your garden in ayear
Experience in coffee growing 0.032 0.223 0.825 27.654
(years)
Access to market information 0.066 0.503 0.617 2403.645
(1=Yes, 0=No)
Monthly income 0.19 1.338 0.187 800.763
how much did you spend on 0.339 1.941 0.058 0.002
weeding
total household size -0.172 -1.089 0.282 129.422

R2 = 0.205
 CONCLUSIONS
• All respondents were familiar with price
fluctuation and 98.5% were affected

• Poor harvesting methods and limited

market and long distance to market
place were the major challenges

• Farmers practiced hoarding and also

engaged in other income generating
activities to mitigate the problem.

• The major cause of price fluctuation was

poor post-harvest methods at 24.6%

• Coffee is the major cash crop grown in

Bulera Sub County at 29.1% followed by
beans and maize

• Location and money spent on weeding

significantly affect the price of coffee.
 
 RECOMMENDATIONS
• Government should set a minimum fair coffee price.

• Government should register all coffee traders.

• Government should establish Banks specifically for farmers.

• Extension services should be provided to coffee farmers.

• Coffee farmers should diversify in order to compensate for losses.

• Market places should be established near coffee farmers.

• Farmers should ensure good harvesting and post harvest handling.

• Government should provide inputs at low prices and on credit.

THANK YOU FOR LISTENING.