Farm Resources Utilization on the Integrated System of Bali Cattle-Palm Oil

Abstract

A study on cattle-oil palm integrated farms aimed to identify the level of utilization of farmer resources, and the technical efficiency at the individual level compared to its best potential achievement (frontier production). Observations were conducted on 152 farmers in four sub-districts in Paser Regency, East Borneo. They were randomly selected in two stages: (1) choosing a farmer group, and (2) choosing farmers from the selected group. Model the causal relationship between resource utilization and output of mixed farming using the Cobb-Douglas equation. Regression analysis was used to estimate the degree of technical efficiency ratio using the stochastic frontier analysis. The results of the analysis showed that farm cattle production was at a constant return to scale, meaning that a doubling of the farm outputs was obtained from doubling the resources used. The number of cattle ownership and labor are two factors that significantly increase farm output. As much as 46.7 percent of farmers achieve the first and second grades of technical efficiency with an efficiency index range is 0.7-0.9. The rest or 53,3 percent have an index range of below 0.7. This means that there is still a large chance for this sector to use resources more efficiently. Cattle are reproducible and transferable capital assets, it is relatively practical and affordable for farmers to provide them. While the productivity of oil palm plantations decreases due to aging, the addition of livestock assets can be relied upon to strengthen farmers' livelihood and income.