Technical efficiency of rice farming in Aceh Province, Indonesia

Abstract

This study measures the technical efficiency of rice farming in Aceh Province, Indonesia. A sample of 5,351 households from the 2017 Household Farming Cost Structure Survey conducted by the Central Bureau of Statistics of Aceh Province, Indonesia were gathered and analysed using the Data Envelopment Analysis (DEA). Three inputs (i.e., number of labour working days, fertilizer, and seeds) and one output (i.e., number of rice harvest) were used to measure the technical efficiency of rice farming in the province. The study recorded a very low average level of technical efficiency either using a Constant Return to Scale (CRS) or a Variable Return to Scale (VRS) approaches. Two inputs were found not optimal for rice farming activities, namely the number of labour working days and the use of fertilizers, while the use of seeds was found optimal. The study suggests that the farmers should use fertilizers proportionately to the land area. The use of agricultural technology should be intensified to minimize the use of excess labour to reduce wage spending.