Determining technical, allocative and cost efficiencies of rice farmers in Kedah, Malaysia using data envelopment analysis

Abstract

This study estimates technical, allocative, and cost efficiency using cost DEA model under both constant returns to scale (CRS) and variable returns to scale (VRS) respectively using survey data of 70 rice farmers from Kedah, Malaysia. In case of cost efficiency only 4.29% of the farmers were 100% technically efficient under CRS while it is increased into 16.90% under VRS. The average technical, allocative and cost efficiencies were estimated at 0.28, 0.878 and 0.255 respectively under CRS while they were increased into 0.61, 0.883 and 0.533 respectively under VRS.