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Productive efficiency of specialty and conventional coffee farmers in Costa Rica: Accounting for technological heterogeneity and self-selection

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  • Wollni, Meike
  • Brümmer, Bernhard
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    Abstract

    A steep decline in coffee prices at the producer level led to considerable pressure for farmers in Costa Rica and producer countries all over the world. One possible reaction was moving to specialty markets, where price pressure was perceived to be lower. We use original survey data from 2002/2003 and 2003/2004 to analyze the factors influencing participation in specialty markets and to estimate separate production functions for specialty and conventional coffee farmers allowing for farm-specific inefficiencies. Applying a sample selection framework, we find significant selection bias in the sub-sample of specialty farmers and evidence for the overestimation of efficiency, if this bias is not adequately controlled for. Among the most important factors that influence farm-specific efficiency levels in the two sub-samples are the availability of additional income activities, experience in coffee cultivation, and membership in cooperatives. Based on the results, we derive policy recommendations to improve farmers’ production performance and ability to cope with the effects of the coffee crisis. These policy measures include the provision of extension services with respect to farm management skills, the creation of income opportunities in rural areas, and the support of farmer-owned cooperatives.

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    Bibliographic Info

    Article provided by Elsevier in its journal Food Policy.

    Volume (Year): 37 (2012)
    Issue (Month): 1 ()
    Pages: 67-76

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    Handle: RePEc:eee:jfpoli:v:37:y:2012:i:1:p:67-76

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    Web page: http://www.elsevier.com/locate/foodpol

    Related research

    Keywords: Coffee; Costa Rica; Stochastic frontier analysis; Sample selectivity; Specialty markets; Technological heterogeneity;

    References

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    Cited by:
    1. González-Flores, Mario & Bravo-Ureta, Boris E. & Solís, Daniel & Winters, Paul, 2014. "The impact of high value markets on smallholder productivity in the Ecuadorean Sierra: A Stochastic Production Frontier approach correcting for selectivity bias," Food Policy, Elsevier, vol. 44(C), pages 237-247.
    2. Vaillant, Julia & Nordman, Christophe Jalil, 2013. "Inputs, Gender Roles or Sharing Norms? Assessing the Gender Performance Gap Among Informal Entrepreneurs in Madagascar," Economics Papers from University Paris Dauphine 123456789/12203, Paris Dauphine University.

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