The Relative Economic Efficiency of Irrigated Rice Farms, West Java, Indonesia

185 p.Thesis (Ph.D.)--University of Illinois at Urbana-Champaign, 1982.The main objectives of this research are to assess the relative economic efficiency of irrigated rice farms, and to evaluate the effectiveness of the policy of subsidizing fertilizer and controlling the price of rough rice, as a measure to increase rice output and employment.This study uses the Cobb-Douglas normalized profit and factor share functions developed by Lau and Yotopoulos. The estimates are computed by the seemingly unrelated regressions as proposed by Zellner for the dry season of 1979, the wet season of 1979/80, and the dry season of 1980.The results indicate that except for the non-tractor irrigated rice farms in the wet season of 1979/80, the hypotheses of relative equal absolute price efficiency for all groups of farms are not rejected. In addition, the difference in the farmer's level of education appears to have no differential allocative effect on labor.Price support policy is more effective than fertilizer subsidy in increasing output and employment. However, further study is needed to determine the cost and benefit of the policies of fertilizer subsidy and price support for the government, producers, and consumers.In relation to land reform, this study gives inconclusive results since for the dry season of 1979 and the wet season of 1979/80, the production function indicates constant returns to scale while for the dry season of 1980 the production function indicates increasing returns to scale.U of I OnlyRestricted to the U of I community idenfinitely during batch ingest of legacy ETD