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Production and Cost Efficiency Analysis Using Frontier Stochastic Approach, A Case on Paddy Farming System With Integrated Plant and Resource Management (IPRM) Approach In Buru District Maluku Province Indonesia

August 28th, 2013 No comments

Production and Cost Efficiency Analysis Using Frontier Stochastic  Approach, A Case on Paddy Farming System With Integrated  Plant and Resource Management (IPRM) Approach In Buru  District Maluku Province Indonesia

Ismatul Hidayah,  Nuhfil Hanani,  Ratya Anindita,  Budi Setiawan

Abstract

The purpose of this study was to determine the level of production and cost efficiency on paddy farming system with integrated plant and resource management (IPRM) approach in Buru District Maluku Province. Maximum  Likelihood Estimation (MLE) method was used to estimate parameters in both frontier stochastic models. 120  respondents was determined by using simple random sampling method. The empirical finding shows that the  varies of the error term in both models are mostly influence by inefficiency factors (γ production= 0.933; γ cost = 0.948) rather than stochastic factors. The average  technical efficiency is 0.855 and 75.83% respondent already  operates in this level of efficiency. The average cost efficiency is 0.86 and 80% of respondent already achieve  this level of cost efficiency. These findings indicate that rice farming system with integrated plant and resource  management approach in the research area are efficient and profitable.
Keyword: Rice, Production efficiency, Cost efficiency, IPRM approach, Indonesia, Stochastic frontier download full teks