Determinants of Technical Efficiency Among Coconut Smallholder Production in Johor, Malaysia: A Cobb Douglas Stochastic Frontier Production Approach

Abstract

This study highlights technical efficiency of crop production as an important aspect of pursuing output growth in agriculture and smallholders’ farming. Using a randomly selected sample of 152 smallholder coconut in Johor, Malaysia, a stochastic frontier production model was applied, using Cobb–Douglas production function to determine the production elasticity coefficients of inputs, technical efficiency and the determinants of efficiency. The study reveals that coconut production responds positively to increases in fertilizers, fungicides and the area planted. The study also found that transportation, education and experience were the significant determinants of technical efficiency. The technical efficiency analysis suggests that about 60% of smallholders in the sample are below 70% efficient and suggesting that opportunities still exist for increasing technical efficiency among smallholders through better use of existing resources and technology. The results highlight some recommendations in improving efficiency by promoting access to productive resources, education and more reliable transportation systems.