Technical Efficiency of State-Owned Sugarcane Production in East Java

Abstract

This study aims to (1) identify the factors that influence the production of plant cane and ratoon cane, (2) determine the level of production efficiency of plant cane, ratoon cane, and poll, and (3) identify the factors that influence the inefficiency of plant cane and ratoon cane production. The sugarcane estate for this study is owned by a state company in East Java. The total number of estate is 1,404 estate divided into 531 plant cane estate and 873 ratoon cane estate. The data used is secondary data sourced from the production data for the 2017-2018 planting season with some inputs: land area, fertilizers, herbicides, labor, age of plants harvested and data of land types. From the analysis, it was revealed that (1) factors that influence the increase of plant cane production are land area, ZA fertilizer, harvest labor, and types of fields, while dummy varieties affect decreasing on it. Meanwhile for ratoon cane are land area, SP36 fertilizer, ametryn herbicide, harvest labor, type of fields, and HGU land type while estate labor, mechanization, and dummy varieties affect decreasing on it, (2) sugarcane farming is technically efficient with the value of efficiency for the plant cane is 0.9621, ratoon cane is 0.9456 and poll of both is 0.9518, (3) factors affecting the inefficiency for plant cane are formal education and rank levels of plant officer. However the coefficient of the formal education variable is negative and the rank level coefficient is positive. A higher level of education will increase production, but a higher rank level of plant officer will decrease it. Improving education levels can be provided by giving mentoring or the provision of courses. Another thing that can be done is by allowing plant officer to benchmark to other similar companies. In ratoon cane, there is no effect of technical inefficiency. So an increase in ratoon cane production can be done by increasing the use of production input or by ratoon maintain techniques.