Technical efficiency and technology gap in Indonesian rice farming

Abstract

This study aims to estimate the technical efficiency and technology gap in Indonesian rice farming, and analyze its determinants. An analysis of DEA Metafrontier and Tobit regression was applied respectively for the first and second objective. The data is based on farm level data of fifteen rice-producing provinces in Indonesia. The result showed that the technical efficiency based on metafrontier estimation is slightly lower than the technical efficiency based on regional frontier estimation, indicating the existence of technology gap which is quite small. Net income, education, and irrigated rice field found related to the technical efficiency and technology gap. Meanwhile, the effect of other factors on the technical efficiency and technology gap is ambiguous. Hence, this study suggests that these three factors should be considered in the policy to increase technical efficiency and to reduce the technology gap in Indonesian rice farming.