Economic reforms and cost efficiency of coffee farmers in central Kenya: a stochastic-translog approach

Karanja, Andrew M.; Kuyvenhoven, Arie; Moll, Henk A.J.

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Title:	Economic reforms and cost efficiency of coffee farmers in central Kenya: a stochastic-translog approach
Authors:	Karanja, Andrew M. Kuyvenhoven, Arie Moll, Henk A.J.
Year:	2007
Periodical:	Discovery and Innovation (ISSN 1015-079X)
Volume:	19
Issue:	2
Period:	June
Pages:	122-132
Language:	English
Notes:	biblio. refs.
Geographic terms:	Kenya East Africa
Subjects:	small farms coffee efficiency Economics, Commerce economic policy Coffee growers--Economic conditions
External link:	https://www.ajol.info/index.php/dai/article/view/15793
Abstract:	Using a stochastic cost frontier model based on household cross-sectional data collected in 1999 and 2000, the authors analyse the cost efficiency levels of smallholder coffee farmers in four districts in Central Province, Kenya. The 200 households surveyed were selected through a two-stage random sampling procedure. A second level, regression analysis, was also undertaken to relate the derived inefficiency index to farm, household, institutional and economic factors. Results indicate that the farmers in the region are cost efficient with a mean cost inefficiency level of 8 percent. There are, however, wide dispersions of the farm-specific inefficiency levels, which range from 1 percent to 66 percent, with 90 percent of the farm households having inefficiencies below 15 percent. Farm-specific cost inefficiencies are significantly influenced by farm size, amount of farm income and availability of credit. Other household demographic factors, such as age, household size and education level, as well as institutional and economic factors, such as availability of extension services and off-farm employment, did not significantly affect the levels of inefficiency. The authors conclude that smallholder-based agricultural development policy is still relevant and an efficient mode of organizing production in Kenya, even after the major institutional and economic changes brought about by market liberalization. Bibliogr., sum. in English and French. [Journal abstract]