Small Specialty Coffee Farmers’ Decision-Making Factors in an Asymmetric Information Market Environment

Abstract

The global “Specialty Coffee” (SC) market is expected to grow from USD 53.67 Billion in 2021 to USD 152.69 Billion by 2030, at a CAGR of 12.32% during the forecast period 2022-2030. This growth mainly depends on prices coordinating the SC supply chain through information exchange. However, the current coffee price crisis threatens the sustainability of the coffee industry and the livelihoods of millions of coffee-growing families due the information asymmetries. This study investigates the determinants of SC prices that influence the optimal selling decision of small SC farmers, then as main contribution of this study we hypothesised that seven factors determine SC prices, factors which have been studied by different researchers but in an isolated manner, taking into account these factors at the same time, small specialty coffee farmers could make optimal selling decisions by choosing the best coffee price. The study used: IBM software chi-squared statistic and thematic analysis to determine the mean selling decisions factors which stablish the price of coffee. Primarily data was collected from 52 small SC farmers from Planadas Tolima involved in the local business adopting a purposive sampling technique. Research findings revealed a positive correlation between price and the seven independent variables object of this study with a significance of 95%. We concluded that there is a need to consider the variables being studied to solve the information asymmetries in the small SC industry so farmers can make optimal selling decisions. As knowledge of the availability of market information factors examined along the coffee supply chain is deeply understood, we might be able to provide the measurement of information asymmetry in the SC industry and propose a solution in order to solve the SC market disparities to benefit small farmers.