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Technical Efficiency and Technological Change in Rubber (Hevea brasiliensis) Farming in Batang Hari Regency, Jambi, Indonesia
Dissertation Abstract:
This study aimed to measure the technical efficiency and technological change in rubber farming. It also examined the determinants of technical efficiency. Total factor productivity (TFP) was decomposed into gains from technical efficiency and technological change.
Data collection was done in Batang Hari regency, Jambi, Indonesia for farmers belonging to the traditional group and to government states. These cross section data were used to simulate the behavior of the time series data, based on potential yield and age of tree. The modified translog production frontier function was constructed to decompose TFP.
The average technical efficiency (TE) was 88.0, 87.9, and 88.7 percent in group ages 1 (7-13 years), 2 (14-17 years), and 3 (18-30 years), respectively. There were 29.0, 27.7, and 30.3 percent of farmers who attained TE indices from 96 to 100 percent in group ages 1, 2, and 3, respectively. This means that 69.7-71.0 percent of farmers were less efficient. Farmers in government estates used the HYV; therefore they have the same technological frontier. However, some traditional farmers used local varieties. Among this group, there was a mix of technologies that could muddle the analysis. Any program to help farmers improve technical efficiency should focus more on the farmers in group age 2 where there was around 11-15 percent possibility of increasing output which can help the farmers to exploit the peak potential yield of their crops.
The main factors influencing positively the TE level achieved were farmer education, farmer experience, and the number of adults in the family. Other factors such as tapping age of the tree and family size influenced TE negatively. Any attempt to improve income should therefore focus on increasing the level of education and experiences of the rubber farmers.
The farmers experienced positive technological change in group age 1 with values ranging from 13.9 to 15.1 percent, and from 2.3 to 4.6 percent in group age 3. Total factor productivity growth was influenced more by technological change than by technical efficiency in all group ages. Therefore, any attempt to increase productivity should be geared more to the introduction of new technology, i.e., HYVs more widely for all groups of farmers, and the training of farmers on the package of knowledge.
