Abstract
The paper compares technical efficiencies and technological gap ratios for oil palm
 smallholders in islands/regions of Indonesia. A stochastic metafrontier model was applied to
 estimate the technological gap and compare on-farm technical efficiency. The results provide
 empirical evidence of heterogeneity in production technology across smallholders located in
 different regions. The results may provide support for specific agricultural policy regionally, in
 terms of supported farmer schemes and improvement of managerial capabilities of farmers on
 using of resources efficientl
Highlights
Indonesia currently is the largest oil palm-producing country in the world, where around 57% of the world's CPO production comes from Indonesia
The results provide empirical evidence of heterogeneity in production technology across smallholders located in different regions
This study aims to investigate the technical efficiency of oil palm smallholders in Indonesia by considering the comparability of frontier sizes among oil palm smallholder groups according to region/ islands
Summary
Indonesia currently is the largest oil palm-producing country in the world, where around 57% of the world's CPO production comes from Indonesia. Exports of CPO and its derivative products throughout 2019 reached 36.17 million tons (Directorate General of Estate Crops, 2021). In addition to large plantations (government and private sector), oil palm plantations are cultivated by smallholders. 34% of the 15 million hectares of oil palm planting area in Indonesia noted are smallholder plantations. Oil palm production has increased over the years, it has increased less than the area cultivated. The most significant problem of the oil palm industry in Indonesia is how to increase productivity growth, especially for smallholders. Indonesian oil palm smallholders produced an average of 3.24 metric tons per hectare, far below that of large plantations reaching 4.44 tons of CPO/hectares (Directorate General of Estate Crops, 2021)
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