Technical Efficiency of Smallholder Oil Palm Farmers: An Application of Stochastic Frontier Analysis

International Journal of Agriculture & Environmental Science

© 2020 by SSRG - IJAES Journal

Volume 7 Issue 1

Year of Publication : 2020

Authors : W. Welda, H. Hasnah, Rusda Khairati

10.14445/23942568/IJAES-V7I1P109

How to Cite?

W. Welda, H. Hasnah, Rusda Khairati, "Technical Efficiency of Smallholder Oil Palm Farmers: An Application of Stochastic Frontier Analysis," SSRG International Journal of Agriculture & Environmental Science, vol. 7,  no. 1, pp. 43-47, 2020. Crossref, https://doi.org/10.14445/23942568/IJAES-V7I1P109

Abstract:

This study aims to analyze the production function of oil palm farming, analyze the technical efficiency of smallholder oil palm farmers. The study was conducted in 2019 in Dharmasraya Regency, which is a production center for oil palm plantations in West Sumatra. Data were analyzed using the Cobb-Douglas stochastic frontier production function. The results show that the use of labor, Urea, KCl, NPK, Dolomite, manure, pesticides, seedling variety, and farmers' category have a significant effect on the productivity of oil palm. While variables of labor, KCl, NPK, Dolomite, and seedling variety use have a positive impact on oil palm production, the use of Urea, manure, pesticides, and farmers' category has a negative effect on oil palm production. The average level of technical efficiency of smallholder oil palm farmers is 0.73. Impressive results that individual farmers are more efficient than partnership farmers. Production inputs should be applied appropriately to increase the productivity of oil palm.

Keywords:

oil palm productivity, technical efficiency, stochastic frontier

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