A wide range of previous studies has already examined the economic and environmental efficiency of coffee production, comparative advantages, and the positive impact of the sector development on the livelihood of the smallholder farmers. However, the concerns from the incomplete markets, weak institutional structure, and monopolistic power of buying agents associated with farmers’ opportunistic behaviours have rarely been elucidated. Therefore, the overall objective of our study was to discuss the future development for the market of sustainable-certified coffee in Dak Lak, Vietnam.
In this regard, the smallholder farmers are the core factor for the success or failure of governments’ programs to reinforce sustainable production and export earnings. Mainly guided by the stochastic production framework and theory of transaction cost economics, the studies combined different methodological approaches including stochastic frontier analysis (SFA), cost-benefit analysis (CBA), multinomial logistic (MNL), binomial logistic, and seemingly unrelated regression (SUR). Primary and secondary data were gathered from the two-stage survey in Dak Lak, Vietnam. The methods of data collection included direct interviews, key informant interviews, and field observations in the 2016 and 2017 crop year.
The results from SFA show that there was no difference in the average technical efficiency score between sustainable-certified and conventional farmers as they both have been exercising poor farming practices such as excessive use of fertilizer, over-irrigation, improper pruning, pesticide overuse, and choice of old varieties in replantation process.