Determinants of Technical Efficiency on Pineapple Farming

Abstract

This study analyzes the pineapple production efficiency of the Integrated Agricultural Development Project (IADP) in Samarahan, Sarawak, Malaysia and also studies its determinants. In the study area, IADP plays an important role in rural development as a poverty alleviation program through agricultural development. Despite the many privileges received by the farmers, especially from the government, they are still less efficient. This study adopts the Data Envelopment Analysis (DEA) in measuring technical efficiency. Further, this study aims to examine the determinants of efficiency by estimating the level of farmer characteristics as a function of farmer’s age, education level, family labor, years of experience in agriculture, society members and farm size. The estimation used the Tobit Model. The results from this study show that the majority of farmers in IADP are still less efficient. In addition, the results show that relying on family labor, the years of experience in agriculture and also participation as the association’s member are all important determinants of the level of efficiency for the IADP farmers in the agricultural sector. Increasing agriculture productivity can also guarantee the achievement of a more optimal sustainable living in an effort to increase the farmers’ income. Such information is valuable for extension services and policy makers since it can help to guide policies toward increased efficiency among pineapple farmers in Malaysia.