Title: Technical Efficiency of Rice Farming in Indonesia: Study on the Island of Java
Authors: Tri Haryanto ( Universitas Airlangga ), Basri Abdul Talib and Norlida Hanim Mohd Salleh ( University Kebangsaan Malaysia)
Publisher: Malaysian Economic Journal
Abstract
This study uses Stochastic Frontier Analysis (SFA) to estimate the level of technical efficiency and analyze the determinants of technical deficiency in rice farming on the island of Java, Indonesia. The data for this study are based on an investigation into the cost structure of rice farming carried out by the Central Bureau of Statistics of the Republic of Indonesia in 2008. The study area consists of three rice producing regions on the island of Java, namely East Java, Central Java and West Java. The results of the study show that the average technical efficiency in the East Java region is 0.851. Meanwhile, in Central Java and West Java it is 0.836 and 0.805 respectively. Farmer income has a negative and significant impact on technical insufficiency. On the other hand, farmer age, source of financing and land size give a positive and significant impact on technical insufficiency. Furthermore, the impact of other variables such as formal education, community assistance and disasters and floods on technical insufficiency varies by region.
Keywords: Technical proficiency; rice farming; stochastic expenditure function
