Abstract:
This paper presents empirical findings on resource productivity and allocation
efficiency in smallholder coffee farmers in Rungwe district. The data used in this
paper are based on a case study that involved interviewing 90 farmers. A Cobb-
Douglas production function was used to estimate the production organization of
the coffee farmers, and their efficiency in resource use. The results show that the
farmers display a low level of efficiency in using available resources. The results
indicate further that farmers would increase farm productivity by the using adequate
capital-intensive input levels in order to maximize their efficiency. In order to
achieve the use of capital-intensive inputs, farmers should take advantage of
increasing their bargaining power in both input and output markets. Farmers'
groups/associations further provide group liability in the procurement of credit from
both formal and informal financial lending institutions. This in turn will improve
farmers input purchasing power. The knowledge and skill on how to improve both
the institutional and technical aspects of coffee production require regular updating
so that farmers can optimize the use of available resources. Continuing education
for farmers is therefore emphasized for promoting efficient resource utilization as
well cis enhancing farm productivity.
