Technical, Allocative and Economic Efficiency of Pineapple Production in West Java Province, Indonesia: A DEA Approach

Abstract

Low productivity in horticulture is mainly due to the inability of the farmers to exploit the available technologies fully, resulting in lower efficiencies of production. Data Envelopment Analysis (DEA) is used to estimate technical, allocative and economic efficiency also Tobit regression is used to determine factors of technical and economic inefficiency in the pineapple cultivation on 142 farmers in West Java Province, Indonesia. The study has indicated that most of the pineapple farms have shown technical, allocative and economic inefficiency problems. Data Envelopment Analysis (DEA) results showed that farmers were inefficient in the pineapple production with mean technical, allocative and economic efficiency level of 70.1%, 34.1% and 24.1%, respectively. A Tobit regression model results on the determinants of fifteen socio-economic, demography and institutional variables revealed that land productivity had positive and significant contribution on technical and economic efficiency. Market distance and capital productivity had positive and significantly influenced the technical efficiency and labor productivity also land ownership had positive and significant contribution to the economic efficiency. Counseling and off-farm income contributed negatively to the technical efficiency and farmer experience also contributed negatively to the economic efficiency. These finding suggests that pineapple production in the research location would be significantly improved by cultivating on farmer's own land and getting better counseling from about the pineapple's good agricultural practices.