Impact of Agricultural Credit on Coffee Productivity in Kenya

To conduct the DEA analysis, coffee output at the farm level and seven inputs were considered. Gender and level of education were included in the model as control variables. The relevance of variables of each included in the model is hereafter expounded.

B_(itc_i ) is the quantity of harvested coffee in kilograms per acre by coffee farm i in year t with c_i standing for whether smallholder farmer had credit (i=1) or not (i=0). The input variable a_i for coffee farm i in year t is given as:

Labor cost (a_1 ): the total annual cost of labor in Kenya shillings used by smallholder coffee farmers (SHCF), whether participating farmers in the program (PF) or non-participating farmers in the program (NPF).
The structure of labor (a_2): The proportion of family labor involved in coffee farming. Fertilizer (a_3 ): The cumulative number of 50-kilogram bags of fertilizer applied per year on the coffee farm.
Farming area (a_4 ): the total acreage of coffee.
Age of the coffee tree (a_5 ): taken to be equivalent to from the date of transplanting of the existing coffee bushes to-date
Agrochemicals (a_6 ): the total liters of fungicides and pesticides applied on the coffee farm per year.
Age of the farmer (a_7 ): This variable represents how old the farmer is in years
Gender (a_8 ): is a dummy variable of the sex of the household head with 1 if male and 0 if female.
Education (a_9 ): This is the highest level of formal education of the head of the household. It is coded 1, 2, 3, and 4 representing no formal education, primary, secondary, and tertiary 4 respectively.
Extension visits (a_10 ): This variable represents the number of times farmers received advice on sound agronomical practices from extension workers. a_10 is measured as the total number of visits to the coffee producer during the period.
Coffee variety (a_11 ): is a dummy variable with a value of 1 for the farmer who has improved coffee variety and 0 for a farmer who planted traditional varieties.
Cropping system (a_12 ): is a dummy variable with a value of 1 if the farmer practices a mono-cropping system and 0 otherwise.