Investigation of production efficiency and socio-economic factors of organic rice in sumber Ngepoh District, Indonesia

Abstract

Recently, environmental preservation and the back-to-nature approach to living have become a great lifestyle. The conditions for making organic rice have received a significant amount of attention in the rice market. The study of production efficiency will become substantial to the improvement of organic rice farming to fulfill rice demand. This study investigates the relevant variables which affect the production efficiency of organic rice. The Sumber Ngepoh is one of the largest districts in the rice-producing province of Indonesia. The production stochastic frontier function and the cost stochastic dual frontier is utilized to analyze the data. The technical, economic and allocative efficiency is analyzed to determine the significant variables. Moreover, the socio-economic variables are also investigated. The averages of the technical, allocative and economic efficiencies are 54.3%, 52%, and 31.3%, respectively, which are categorized as inefficient production. The averages indicate that organic rice farming in the Sumber Ngepoh District is not optimal and needs to be optimized. The results show that land, seed, organic fertilizer, organic pesticide, and hand tractor variables have a significant effect on organic rice production. The socio-economic variables which significantly affect all efficiency levels are farm size, experience, and family member.