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Marketing cooperatives are important in the provision of credit both in cash, and delivery
of various inputs including fertilizers, crop protection chemicals, and pumps for spraying
crops and extension services. However, since the era of liberalization in the 1990s, these roles
have diminished leading to low levels of satisfaction with cooperatives’ service delivery on
the part of coffee farmers. Production quantities are erratic and farm level earnings from
coffee are relatively low despite the recent rise in global prices of coffee. The result is
disincentive in coffee farming and substitution to other crops. The objectives of the study
were to investigate how governance influences service provision by cooperative societies in
Kigumo District, to determine the extent to which coffee price fluctuations influence service
provision by coffee cooperative societies to their members in Kigumo District and to find out
how access to credit facilities influence service provision by cooperative societies to their
members in Kigumo District. Literature reveals that, coffee cooperative societies in the
region are marred by mismanagement and corrupt practices which impairs service delivery.
The target population was all coffee farmers in Kigumo district and the management
committee of the selected coffee cooperative societies. The study used descriptive research
design and randomized sampling. Primary data was collected by structured questionnaire
from 199 coffee farmers and secondary data from management committee were used to
provide information on the issues under investigation. The data was coded, entered and
analyzed using the Statistical Package for Social Sciences (SPSS). Results indicate the coffee
industry in Kigumo district has recorded erratic production fluctuation for the 2005/6 to
2011/12 period. Prices have been on the increase but the variance has differed across the
societies. The study found that good governance promotes service delivery and vice versa.
Thus indicators of good governance such as level of education of managers, managerial
training and experience are fundamental to provision of quality services to coffee
cooperatives. It was noted that the coffee industry experiences fluctuations in unit coffee
prices. Low coffee prices reduce coffee farmers’ satisfaction with service provision by the
cooperative and lead to decline in production. Access to credit facilities is not of significant
influence to service provision. However, the direction of relationship is such that higher
access to credit increases satisfaction with services provided. The researcher recommends
that the government comes up with a criterion of selecting management committees,
increases agricultural extension workers and seeks alternative markets to stabilize prices and
production. To understand the role played by other stakeholders in coffee sector, further
studies can be conducted to investigate the role of microfinance institutions and banks in
improving production and hence livelihoods of coffee farmers in Kenya. A comparative study
may be useful to document lessons learnt from neighboring countries that have success
stories in service provision within coffee cooperatives.