Technical efficiency and risk of pineapple production among smallholders in Johor, Malaysia
Pineapple is one of the most important crops in Malaysia and government recognizes its potential for exploitation. To that end, increasing pineapple production through improvement in its yield seems to be a reliable approach to achieve the Malaysia Pineapple Industry Board’s agency yield target o...
Saved in:
| Main Author: | |
|---|---|
| Format: | Thesis |
| Language: | English English |
| Published: |
2023
|
| Subjects: | |
| Online Access: | http://psasir.upm.edu.my/id/eprint/112607/1/FP%202023%206%20-%20IR.pdf |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| Summary: | Pineapple is one of the most important crops in Malaysia and government recognizes its
potential for exploitation. To that end, increasing pineapple production through
improvement in its yield seems to be a reliable approach to achieve the Malaysia
Pineapple Industry Board’s agency yield target of 64 metric tonnes/ha in 2020. Efforts
are being focused on Johor as the largest pineapple producing state (54%) in Malaysia
which has the potential to achieve the yield target, with the government supporting
smallholder production capacity. However, despite the various governmental support,
pineapple production is hampered by the lower yield compared to the yield target. In
2020, average national pineapple yield was roughly 22.9 metric tonnes/ha. Since at a
current technology, the yield is normally associated with the level of input use, the low
pineapple yield was potentially caused by the technical inefficiency in the input use. The
production inputs are essential to pineapple farming, which is likely to result in output
variability (risk) and inefficiency. This indicates that the empirical models for measuring
technical efficiency need to consider the element of production risk associated with
inputs in pineapple production.
This research aims to shed light on the possible causes of pineapple production
fluctuation being experienced by pineapple smallholders in Johor state in recent years.
The gap between observed output and achievable output presents an opportunity for an
increment in output which offers the inspiration for this study as it is concerned with
examining the technical efficiency on pineapple production. The main objective of this
study is to determine technical efficiency and production risk of smallholder pineapple
production in Johor as two possible sources of the production variability. The specific
objectives were to estimate the technical efficiency of smallholders’ pineapple
production; to analyse production risks with respect to the inputs levels of smallholders’
pineapple production; and to determine influencing factors that affect the technical
efficiency of smallholders’ pineapple production. Data from a total of 290 randomly
selected smallholder pineapple farms in Johor by using multistage sampling procedure.
The research employed purposive sampling to select districts in Johor based on their
relative importance in pineapple production and a systematic random sampling method
to acquire random samples. The data for the study were collected from the pineapple
smallholders in Johor from June till December 2021. The study employed stochastic
frontier production function model (SFA) with flexible risk specification for parametric
approach, and data envelopment analysis (DEA) for non-parametric approach without
accounting for production risk in order to depict more holistic feature of pineapple farms
efficiency in Johor.
For the first objective, technical efficiencies results of smallholder pineapple producers
were compared between SFA and DEA techniques. Specifically, the average efficiency
score of SFA was 68.1%, implying that the farmers in the study area were technically
inefficient. On the other hand, the result of DEA technical efficiency score was 96.0%,
also, implying that the pineapple farmers were technically inefficient. For the second
objective, pineapple suckers were found to be risk reducing input while fertilisers and
hormones were risk increasing inputs. By implication, it shows that risk-averse farmers
are expected to use more suckers in the study area. The results also revealed that the
mean output was positively influenced by suckers, fertiliser, agrochemicals, labour and
hormone. For the third objective, several characteristics of farm operators such as
demographics variables (farming experience); and institutional variables (extension
contact and seminar participation); were found to have significant effects on the
technical inefficiency of pineapple production in the study area.
The study concludes that the trans-log production function was the best fit for the data
for estimation of farmers’ technical efficiency as the analysis recorded that technical
efficiency enhances the variability of pineapple production in the study area. The model
estimates showed that production risk contributes considerably to the variability of
pineapple production levels. Findings of this research show that output variability is
primarily explained by technical inefficiency and production risk. It is recommended
that relevant government agencies should ease the accessibility to extension visits, to
hold seminars and promote the sharing of knowledge by experienced farmers, which
could enlighten other farmers towards improving their production volumes.
Furthermore, policy strategies aiming at improving technical efficiency should
emphasise effective and efficient use of existing inputs among pineapple smallholders.
The outcome of technical efficiency and production risk estimation have indicated the
level of utilisation of the present technology used in the production process as well as
rooms for improvement that can be translated to better income and livelihood among the
smallholders. |
|---|