Determinants of Fairtrade Channel Choice and its Effect on Income of Coffee Farm Households

Abstract This article attempts to identify factors determining Fairtrade coffee marketing channel choice and its effect on income of coffee farmers in Jimma zone, based on primary data generated from 153 randomly sampled respondents. The Probit model result ascertain that membership of cooperatives, literacy, access to market information and small-scale coffee farm enhances but remoteness from cooperatives reduces the probability of farmer’s participation in Fairtrade coffee market. Furthermore, OLS model result confirms that coffee farming experience, larger coffee farm, and participation in training lead to increase but access to credit lead to decrease income earning of farmers from coffee. The finding also designates that Fairtrade marketing participation yields considerable income over traditional markets. Based on these, policy measures that advance farmers’ capacity via training, physical access to market places, market information services, participation cooperatives and expansion of Fairtrade markets will lead to increase earning of farmers’ from coffee sector.