Factors Influencing Coffee Growers’ (agents’) Performance on Quality: An Empirical Study of Coffee Growers with Evidence from Tanzania’s Coffee Primary Societies/Associations

Abstract

Significance of this study is centered at making contribution to literature on principal agent relationship by focusing on the relationship between coffee growers (agents) and principals (buying organizations). The study investigates factors that influence quality performance of coffee growers (agents) such as: information sharing, monitoring and negative external influence. The main purpose of this study is to provide an insight on how farmers and buyers relationships can be enhanced in a better way to improve farmers’ performance on coffee quality. Literature review with respect to principal agency theory guides this study. The principal agency theory is used in formulating research hypotheses, which provide foundation for testing developed associations between coffee quality performance and information sharing; as well as monitoring and negative external influence. Data used in this study were collected from one hundred and thirty two (132) primary societies’ managers in Tanzania through interviews and questionnaires. Preliminary data analysis through plot box was conducted to remove outliers. Also reliability and validity were tested for purpose of making this study worth. As this study adopted multiple regression analysis, then all assumptions underlying multiple regression such as multicollinearity, homoscedasticity and Collinearity were tested and all portrayed that assumptions were adhered to. Empirical findings show that information sharing has a significant positive association with coffee growers’ (agents’) performance. Monitoring has a significant positive association with coffee growers’ (agents’) performance on quality. The findings further indicate that there is a significant negative association between negative external influence and coffee growers’ (agents’) performance on quality. Therefore, to improve performance of coffee growers (agents) there should be high information sharing and monitoring while learning on how to respond positively to negative external influence. Quality management is the key driving factor of coffee price in the global market. Thus, all coffee supply chain actors should emphasize quality management aspect in all business processes. To ensure quality management among famers, then buying organizations should establish strong information sharing and monitoring systems. Also, farmers should learn how to positively respond to negative external influence in ensuring that coffee quality is not impaired by negative external influence.