Technical Efficiency of Smallholder Coffee Farmers in Situbondo: A Stochastic Frontier Approach

Abstract Coffee as a commodity that is influential in world trade is one of the commodities that is considered the amount of production so that the demand for coffee can be met by farmers, so it is necessary to pay attention to how farmers use the technology so that it can provide high efficiency. Based on this urgency, this study analyzes the factors that influence the technical efficiency of Arabica coffee farmers. To conduct this analysis, a translog stochastic production frontier function, in which the effects of technical inefficiency are specified as a function of socioeconomic variables, was estimated using the maximum likelihood method. The data used was collected from a sample of 40 farmers in Situbondo district during the 2023 crop year. The results obtained indicated an inefficiency of thirteen percent. The analysis also revealed that farmers’ education level and number of family members are the main socioeconomic variables that affect farmers’ technical inefficiency. The number of family members has a noticeable influence on increasing technical inefficiency. A surprising finding in the results of this study was the variable of farmers’ level of education, because empirically, the higher the education, the higher the knowledge of farmers to do coffee farming well and thus become more technically efficient. However, this was not the case in this study. Farmers with higher education no longer make coffee farming their main job because there is not enough time, mind, and energy for coffee farming activities.