The Impact of Government Food Policy on Farm Efficiency of Beneficiary Small-Scale Farmers in Indonesia

Abstract

Enhancing self-sufficiency and national food security have been strategic policy goals of the Indonesian government. From 2015 to 2019, a food policy program called Upsus Pajale had been implemented to provide input subsidies and extension assistants to farmers for three strategic commodities: rice, maize, and soybeans, to accelerate productivity and increase production. The study was done by interviewing 374 beneficiary farmers. The objectives were to explore production efficiency and the farmers’ perspectives on the policy programs. By conducting stochastic frontier production function estimation, the results show that the mean efficiency level was 0.866. This study revealed that land size, seed cost, and labor cost were found to be important determinants of technical efficiency. In addition, the results of the inefficiency model indicated that age and farmers’ associations had a significant and positive effect on efficiency scores, whereas education had a negative effect. Contrarily, none of the policy program instruments appear to be essential determinants of efficiency. Furthermore, the research found that farmers prioritized their habits and profitability when deciding which crop to cultivate and that pests were their main concerns. Hence, the government should focus on enhancing research and development for improved seedling pest management control and encourage the establishment of farmers’ association to share experience and transfer information and technology for farmers to improve their efficiency.