Economic Efficiency of Organic Coffee Farmers in Kilimanjaro Region

"Organic farming is viewed as affordable farming technology for small scale coffee farmers in Tanzania who cannot afford high costs of production due to continuously increasing prices of inorganic inputs and low prices of coffee. However, there is no consensus among researchers on how organic farming technology affects profit and production efficiency of organic farms. Therefore, this study compares economic efficiency of organic and conventional coffee farming in Kilimanjaro region in Tanzania. Data related to the factors of production and socioeconomic characteristics were collected from 115 coffee farmers. The profit function approach was used. Analytical tools included descriptive statistics and seemingly unrelated regression (SURE). It revealed that the variable costs of organic coffee farming per acre were 45% lower than those of conventional coffee farming while the gross profit received from organic coffee farms per acre was 65% lower than that obtained from conventional coffee farms. Efficiency analysis conducted using the profit function, jointly estimated with wage share equation indicated that economic and technical efficiencies were in favor of conventional farms."