Efficiency analysis of coffee production in Veracruz, Mexico
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Governmental support for coffee production in the 1980’s drove farmers in lesser developed countries to increase plantings of this commodity. In the early 1990’s, most supports ended, and coffee prices hit historical lows. The International Coffee Organization has proposed quality and diversification programs to combat the crisis. Coffee is still a main economic activity for producers in Veracruz, Mexico. In this thesis, the production systems of coffee producing villages after the support era are investigated with a production frontier in order to determine how their productivity has been affected. Also factors such as quality, cash crops production and access to markets are tested with respect to how they affect efficiency of production. Results show that access to markets and producing cash crops make villages more technically efficient. Economies of diversification exist between coffee and cash crops and, in general, productivity of these villages is decreasing during the period studied.