Improving Shallot Farm Business Performance Through Resource Management Efficiency: A Stochastic Frontier Analysis

Didik Suryadi, Yusman Syaukat, Nunung Kusnadi

Abstract

Demand for shallots has steadily increased over time, while production remains seasonal and suboptimal, limiting consistent fulfilment of domestic demand. Expanding output through increased input use or new technologies is costly. Improving efficiency is a more feasible and economically rational strategy. Farmers’ capacity to optimally combine production factors critically influences farm performance and potential output and narrowing the supply gap. So, the appropriate allocation of inputs and the attainment of technical efficiency (TE) are essential for increasing agricultural output. This study examines seasonal differences in technical efficiency and identifies the determinants of inefficiency in shallot farming in Garut Regency. Using purposive sampling, 100 shallot farmers were selected. TE was estimated using Stochastic Frontier Analysis with a Cobb-Douglas production function specification. The findings show significant differences in productivity and TE between the dry and rainy seasons, with a mean TE of 0.931 in the rainy season and 0.844 in the dry season. These results indicate potential output gains of 7.41% and 18.48%, respectively, through full attainment of technical efficiency. The determinants of technical inefficiency include planting density, mechanization, farming experience, membership in farmer groups, and land tenure status.

Keywords: cobb-douglas; comparative; production; technical efficiency

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DOI: https://doi.org/10.20961/jkb.v30i2.127318

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