PRODUCTION EFFICIENCY OF SMALL-SCALE SHALLOT PRODUCERS IN EAST JAVA, INDONESIA

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Published: 2015-03-08

Page: 59-71


SUJARWO .

Department of Agricultural Economics and Agribusiness, University of Brawijaya, Malang, Indonesia.

MICHAEL REED *

Department of Agricultural Economics, University of Kentucky, USA.

SAYED SAGHAIAN

Department of Agricultural Economics, University of Kentucky, USA.

*Author to whom correspondence should be addressed.


Abstract

This study attempts to find ways for small-scale farmers to increase efficiency with their current technology for shallots. The efficiency measurements rely on a double-log production function, which is estimated by Principal Component Regression (PCR) to remove multicollinearity from the model. The results confirm that small-scale shallot farmers have difficulty in allocating their inputs efficiently. Land, seed, and labor are over-utilized; while fertilizer and pesticide are under-utilized. Small-scale shallot farmers have estimated gross profit losses of 32% due to inefficient allocation of inputs.

Keywords: Production function, efficient allocation of inputs, profit gap


How to Cite

., S., REED, M., & SAGHAIAN, S. (2015). PRODUCTION EFFICIENCY OF SMALL-SCALE SHALLOT PRODUCERS IN EAST JAVA, INDONESIA. Journal of Global Economics, Management and Business Research, 2(2), 59–71. Retrieved from https://ikprress.org/index.php/JGEMBR/article/view/1392

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