Is Technological Heterogeneity the Key to Sustainable Coffee Production Efficiency?: A Latent Class Frontier Analysis in the Traditional Coffee Region of Colombia

ABSTRACT Coffee producers deal with uncertainty due to high volatility in coffee prices. To navigate these challenges, producers must balance the tradeoff between higher yield and better quality utilising heterogeneous technologies, such as intensive production methods and environmental management practices. The aim of this study is to identify the extent to which heterogeneous technologies, particularly those focused on sustainable management, can influence the technical efficiency of Colombian coffee farms. Using the Latent Class Stochastic Frontier Model (LCSFM), we studied the unobserved differences in technologies among 387 Colombian coffee farms in the Andes. Our findings show that farms adhering to sustainable standards achieved an efficiency rate of 95.68%, compared to 74.93% for farms heavily reliant on chemical pesticides. These results underscore the efficiency benefits of sustainable practices and provide targeted recommendations to improve productivity among different groups of coffee growers. This research contributes to the broader understanding of how adopting sustainable technologies can enhance efficiency in coffee production, offering key insights for policymakers and practitioners aiming to stabilise and develop the sector.