Efficiency of pepper farms in Sarawak
Pepper is one of the important crops and source of income for 67,000 families in the interior areas of Sarawak. However, pepper farmers faced a few major problems such as the increasing cost of inputs, escalating management cost of pest and disease attacks, and fluctuating pepper price at interna...
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| Format: | Thesis |
| Language: | English |
| Published: |
2013
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| Subjects: | |
| Online Access: | http://psasir.upm.edu.my/id/eprint/78055/1/FSPM%202013%202%20ir.pdf |
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| Summary: | Pepper is one of the important crops and source of income for 67,000 families in the
interior areas of Sarawak. However, pepper farmers faced a few major problems such as
the increasing cost of inputs, escalating management cost of pest and disease attacks,
and fluctuating pepper price at international market (DOA, 2012). Pepper farming
requires a proper management of resources and farming operations to ascertain high
yield at minimum cost and increase farm profit. The previous studies about efficiency in
pepper production in Sarawak by Noorzakiah, Alias, and Sazali (1993), Mohd, Alias,
and Ruhana (1993), and Hamid and Mansor (1997) found that pepper farms in Sarawak
were inefficiently in resource use.
However, there are various factors influence relative performance and efficiency level
among pepper farms such as market factors, geographical location, socioeconomic
background, farming practices, and government intervention. Thus, a single decision
can easily make a difference between efficiency and inefficiency of pepper farms. Therefore, this study is carried out to analyze the performance of pepper farms in
Sarawak by estimating the level of efficiency of pepper farms.
A sample of 678 pepper farmers was selected for this study through field survey that was
conducted from August to December 2009. Stochastic Frontier Analysis (SFA) and Data
Development Analysis (DEA) method were applied to estimate technical, allocative,
economic, and cost efficiency of pepper farms. The inefficiency model and Tobit model
were used to investigate the determinants of efficiency in pepper farming. The factors of
the adoption of farming technology in pepper farming among farms are estimated using
Logit model.
The mean technical efficiency, allocative efficiency, and economic efficiency were
estimated to be 0.518, 0.496, and 0.258 respectively by using SFA method. From DEA
model, the mean technical efficiency under constant returns to scale (CRS) and variable
returns to scale (VRS) were 0.567 and 0.661 respectively while the mean allocative
efficiency and cost efficiency were estimated to be 0.585 and 0.438 respectively. The
mean efficiency scores from DEA model were higher than SFA model, these results
indicate that DEA model fitted tightly to the data set compared than SFA.
Pepper farms are inefficient since the mean of technical, allocative, economic, and cost
efficiency of pepper farms are low. Farmers are technically inefficient in input
utilization and inefficient in input allocation hence they are not maximizing the output
and not minimizing cost. The inefficiencies among pepper farms are due to improper
farm management and misallocation of inputs. Besides, inefficiencies among farms also due to the age of farmers where majority of sample farmers are consist of older farmers.
However, the efficiency in farm management is positively and significantly influenced
by education level, the frequency of contacts with extension agents per year, being
member of farmer’s organization, being full-time pepper farmers, and attending farming
courses and study visits. Therefore, it is imperative that farmers should improve their
farm performance and efficiency level through effective of agronomic education and
extension services. |
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