The use of improved varieties is expected to increase coffee productivity and profitability. However, farmers complain regarding low returns from coffee production which is due to inadequate empirical evidence on the benefit of adopting improved coffee varieties for small holder farmers in the country. This study aimed to test the hypothesis on whether it is profitable in the long run to adopt improved coffee varieties in terms of returns on investment. Data were collected from 320 smallholder coffee farmers of which 122 were adopters and 198 were non-adopters of improved coffee varieties randomly selected from Mbinga and Mbozi Districts using questionnaires and oral interview schedules. The descriptive statistics, Gross Margin (GM), Net Farm Income (NFI), Return on Investment (ROI), Net Present Value (NPV), the BenefitCost Ratio (BCR), and the Internal Rate of Return (IRR) were used to estimate the viability of adopting improved coffee varieties in the study area. The findings indicate that the GM, NFI, ROI, NPV, BCR and IRR for adopters is higher (p<0.005) than for non-adopters. The findings provide evidence that coffee farming using improved coffee varieties is economically viable in the long run. It is, therefore, recommended that farmers should be encouraged to adopt the improved coffee varieties and implement good agricultural practices so as to increase productivity and profitability. The recommended GAPs include applying Integrated Soil Fertility Management Practices (ISFM) to minimize costs of fertilizers, weeding, and disease control. Farmers should also use Integrated Pests Management Practices (IPM) to minimize the cost of pest control.

Keywords : Arabica, coffee, profitability, coffee varieties.