Unravelling the factors affecting agriculture profitability enterprise: Evidence from coconut smallholder production

Abstract

The coconut palm or scientific name Cocos nucifera L. has been called as ‘Tree of Life’ because of its multiuse. Malaysia remains as one of top ten coconut producing countries in the world and coconut is one of important industrial crops after oil palm, paddy and rubber. As coconut plays a significant source of income and employment for majority of smallholders, this study has therefore been undertaken in order to recommend strategies for policy decisions and formulate suitable schemes and programs to ameliorate socio-economic conditions of the coconut smallholders. The present study has brought into focus and issues relating to socio economic status, profitability and production of coconut in Batu Pahat district, Johor. A sample of 152 farmers was selected through a random sampling technique. In addition, the study uses Cost Benefit Analysis and multiple regression model to estimate the factors affecting the profitability of coconut production in Malaysia. The results reveal that the profitability was influenced by different factors including land, labor, fungicides, experience, education and extension visit. While the result for cost benefit analysis showed that in the study area, a cultivation of coconut was a profitable enterprise as indicated by benefit cost ratio, ranging from 5.0-8.4. On that basis, the article proposes some recommendations to improve profitability of coconut smallholders in the future.