Socioeconomic study on technical efficiency of farm rice production.

ABSTRAK ]Economic efficiency consists of two components : price or allocative efficiency and technical efficiency. The first concerns with the successfullness of the firms (farmers) as profit maximizers and the second deals with the maximum output out of a set of inputs that reflects the state of technical knowledge and capital possession. The study of technical efficiency on rice farming in Java is important due to the high level application of modern inputs of fertilizer and pesticide, that farming techniques may be related to technical efficiency and may increase production without much increase cost. The estimated \u27average\u27 production function of OLS regression from cross sectional data may have management bias. The yield criteria is used in this study as a proxy for the technical efficiency due to the most scarce resource of land input in study area. Some other methods used by other researchers are using managerial indexes of education, modernization, information etc., or using Linear-Programming Production Frontier. The analytical results show that the technical efficiency was always related to output and coefficient of inputs, and that the small farmers were better farmers and better use of their abundant inputs of labour, pesticide, and fertilizer on scarce input of land. The use of tractor and draught animal were not clearly related to technical efficiency. Key Words: Efisiensi harga, management bias, usaha tan