Technical Efficiency of Rice Farmers in Pante Piyeue
Devi Andriyani, Cut Putri Mellita Sari, and Hijri Juliansyah
Faculty of Economics and Business, Universitas Malikussaleh, Aceh, Indonesia
hijri@unimal.ac.id
Abstract. This study aims to analyze the technical efficiency of landowner
farmers and sharecroppers of rice farming in Gampong Pante Piyeue, Peusangan
sub-district, Bireuen Regency. This study uses primary data obtained from the
distribution of questionnaires to 37 respondents who are landowner farmers and
sharecroppers in Gampong Pante Piyeue, Matang Glumpang Dua, Bireuen
Regency. The samples are taken using the Purposive sampling method. The Data
Envelopment Analysis (DEA) is used to analyze the data. The results show that
the landowner farmers are more technically efficient than sharecroppers, where
the number of farmers who have reached the level of efficiency as many as 19
respondents.
Keywords: DEA · Technical efficiency · Rice
1 Introduction
Indonesia is the third-largest rice producer in the world and the highest rice consumer in
the world. The rice consumption capita in Indonesia was recorded at almost 150
kilograms (rice, per person, per year) in 2017. Only Myanmar, Vietnam, and Bangladesh
have higher per capita rice consumption than Indonesia. Food dependence on rice has
made the national food supply of Indonesia increased by 75% in 2017.
Even though Indonesia is the third-largest country that produces the most rice in the
world, Indonesia still needs to import rice almost every year (although usually only to
maintain the level of rice reserves). This situation is caused by the lack of optimal
agricultural techniques used by farmers, while the consumption per capita of rice
continues to increase due to the increase of population.
Rice production in Indonesia is dominated by small scale farmers, not by large
private or state-owned companies. Small scale farmers contribute around 90% of the
total rice production in Indonesia. Each farmer has an average land area of fewer than
0.8 hectares.
Agriculture should no longer be seen as a traditional small-scale business. If it is run
and managed well, it will be very profitable so that the products will have a competitive
quality. So, farming does not only require agricultural technology that can improve
quality, but also requires good management.
One of the 10 highest rice-producing provinces in Indonesia is Aceh (NAD). The
rice production of Aceh province reaches 2.5 million tons per year and increased by
13.5 percent in 2017 or 300.000 tons compared to 2016 (BPS Aceh Province, 2017).
There are 69 villages in the Peusangan sub-district, and Pante Piyeue is one of the
434
Andriyani, D., Sari, C. and Juliansyah, H.
Technical Efficiency of Rice Farmers in Pante Piyeue.
DOI: 10.5220/0010435400002900
In Proceedings of the 20th Malaysia Indonesia International Conference on Economics, Management and Accounting (MIICEMA 2019), pages 434-443
ISBN: 978-989-758-582-1; ISSN: 2655-9064
Copyright
c
2022 by SCITEPRESS – Science and Technology Publications, Lda. All rights reserved
villages that has the largest area of rice land or 60 hectares of rice land with a population
of 3,320 people, and 365 people are working on the agricultural sector that consists of
owner farmers and sharecroppers.
Landowner farmers are farmers who own land and work on it themselves, whereas
sharecroppers are farmers who work on other people's land with a production sharing
system (BPS Aceh Utara, 2016).
Differences in agricultural land ownership often lead to differences in the
motivation of farmers to do their farming business. In terms of efforts to increase
production, for example, between landowner farmers far and landless farmers, there
can be different motivations, where the landowner farmers will run their business as
well as possible, both in obtaining maximum production results and in maintaining soil
nutrients so that the process can occur sustainable agriculture, and of course will always
try more to get maximum results because all the benefits will be fully enjoyed without
having to share the results.
Meanwhile, sharecroppers are not as motivated as landowner farmers because they
feel that not all products will be enjoyed by themselves because they must be shared
with landowner farmers. But the sharecroppers will also make maximum efforts to
increase their yields, regardless of the condition of soil nutrients for the future.
Therefore, it is necessary to use production facilities (fertilizers, insecticides, and seeds)
that are on target and on time to increase production yields.
However, due to differences in motivation that will affect the performance of
farmers, it will lead to the use of different production facilities. Therefore, some
preliminary observations are needed to examine the efficiency of rice farming in the
Pante Piyeue.
The following table presents the use of fertilizers, insecticides, seeds, and the results
of the production of landowner farmers and sharecroppers with an area of 2000 m.
Table 1. The Use of Fertilizers (x1), Insecticides (x2), Seeds (x3) and Production Results (y) of
Landowner farmers and Sharecroppers with a Land Area of 2000 m
2
.
Types of
Farmers
Name y (kg)
X1
X2
(ml)
X3
(kg)
Urea
(kg)
NPK
(kg)
Sp-36
(kg)
Sharecroppers Umar 2000 50 25 25 200 20
Harlini 2400 50 50 50 284 20
Masyitah 2400 50 30 30 172 10
Landowner
Farmers
Salamah 2000 50 50 50 314 20
Ibrahim 2800 30 30 30 142 10
M.Amin 2400 50 50 30 254 20
Data Source: Preliminary Observation Results using Questionnaires.
Based on the above table, we can see that there are variations in production from the
use of production facilities so that it will cause different levels of efficiency such as
Harlini and Salamah with the use of the same fertilizer consisting of 50 kg urea fertilizer,
50 kg NPK, 50 kg Sp-36, and 20 kg seeds. However, they obtain different production
results where Harlini gets 2400 kg, while Salamah gets 2000 kg. Besides, Masyitah and
Ibrahim use the same 2 types of fertilizers that consist of 30 kg NPK, 30 kg Sp-36, and
10 kg seeds, but they get different results of production in which Masyitah gets 2400 kg,
and Ibrahim gets 2800 kg.
Technical Efficiency of Rice Farmers in Pante Piyeue
435
This study aims to determine the comparison of the level of technical efficiency of
rice farmers and sharecroppers in Pante Piyeue, Peusangan Sub-district, Bireuen
Regency.
2 Literature Review
2.1 Production
According to Lopang (2016), production is the result of an economic process or activity
by utilizing several inputs. It means that production activities are combining various
inputs to produce outputs.
Production can be defined as the result of a process of economic activity by utilizing
several inputs. Thus, production activity is to combine various inputs to produce
outputs (Yull, 2014). In simple terms, production is an activity that aims to produce and
add value to an item.
The research by Nurung (2002) provides that the results of the use of urea fertilizer
and pesticides do not provide real effectiveness on production. Therefore, the role of
agricultural extension is necessary for providing information to farmers in using inputs
appropriately.
2.2 Seeds
Seeds are the number of rice seeds used by all farmers in the farming process of all
regencies and cities, expressed in kg units (Triyanto, 2006).
The seed is a plant material derived from generative and vegetative that is used for
breeding forest plants (Permenhut P.1/ Menhut-II / 2009).
The use of good seeds and by the rules will produce good quality and quantity of
cultivated plants. The use of too many seeds causes a high perforated population so that
there is competition in the absorption of nutrients, oxygen, and sunlight that results in
decreased production (Respikasari et al., 2014).
Seed is a planting medium that will be used by the farming process of all regencies
and cities, expressed in kg units. The use of good seeds and by the rules will produce
good cultivation plants.
The results of the study (Muhaimin, 2012) show that the seeds input significantly
influences organic rice production in Pakis Sub-district. Another research (Darwanto,
2010) also shows results that seed input has a positive effect on rice production in
Central Java Province.
2.3 Fertilizer
Fertilizer is a material added to the planting media or plants to meet the nutrient
requirements needed by plants so that they can produce well (Anonymous, 2012).
Organic fertilizer is fertilizer derived from nature in the form of the remains of
living organisms, both the remains of plants and animals. Organic fertilizers contain
MIICEMA 2019 - Malaysia Indonesia International Conference on Economics Management and Accounting
436
both macro and micronutrients needed by plants so that they can flourish. Organic
fertilizer consists of manure, green manure, compost, and guano fertilizer (Handayani
et al, 2011).
Fertilizer is a nutrient or food given to plants. Fertilizer is a means and key to the
success of soil fertility and the success of farmers in increasing crop production, so
fertilizer is very influential on production.
The types of fertilizers consist of urea fertilizer, NPK fertilizer, and SP-36 fertilizer.
Fertilization is done a week after planting for Urea and SP-36 fertilizers, while NPK
fertilizer is used two weeks after planting.
The results of the study by Fajar Firmana et al., (2014), the variable that has a
significant influence on the technical efficiency of rice farming is the use of organic
fertilizer at a real level of 15%. The coefficient value of the use of organic fertilizer has
a positive value. This shows that the more use of organic fertilizer, it will increase the
technical efficiency of farming carried out by farmers. The results of this study are in
line with research by Patil et al., (2013) and Oraye et al., (2012), where the use of
organic fertilizers can reduce the use of inorganic fertilizers and have an effect on soil
fertility with the application of balanced fertilization.
2.4 Insecticides
According to Sudarmo (2005), insecticides are chemical substances used to kill or
control pests. Insecticides are needed by farmers to prevent and eradicate pests and
plant diseases.
Insecticides can benefit farming. On the other hand, insecticides can harm farmers
and can be a loss for farmers if there is a misuse of both the way and composition
applied to the plants. Excessive use can cause excessive production costs (Purwono,
2007).
An insecticide is a toxic chemical that can be used to kill all types of insects or pests
that are a nuisance to plants. In using insecticides, the dosage and size must be
considered. The use of insecticides is done 7 or 10 days after planting using the lowest
dose and then carried out when the rice begins to appear to experience interference from
pests.
The results of the study (Ambarawati et al., 2012) show that the input of Urea
fertilizer, NPK fertilizer (Phosnka and Pelangi), organic fertilizer, and labor is efficient.
Whereas economically, the use of pesticides is inefficient, and need to reduce the use
in the right type, dosage, time, and the way to give to produce optimal rice production,
and farmers get the maximum profit.
2.5 Hypothesis
The hypothesis of this study is as follow:
“It is suspected that the use of seeds input, fertilizers, and insecticides is efficient
in producing production output in Pante Piyeue, Peusangan District, Bireuen
Regency”.
Technical Efficiency of Rice Farmers in Pante Piyeue
437
3 Research Methodology
3.1 Population and Sample
The population in this study are all landowner farmers and sharecroppers in Pante
Piyeue as many as 365 farmers (Source: Statistik Kecamatan, 2017).
The sampling is conducted using a purposive sampling method based on certain
considerations, especially the considerations given by a group of experts (Sanusi,
2011). The Specific characteristics of the sample are as follows:
1. Sharecroppers who have a land area of 2,000 m2.
2. Landowner farmers who have a land area of 2,000 m2.
3. Farmers who have both of the above characteristics, and use Urea, NPK,
and SP-36 fertilizers.
Based on preliminary observations and information from village officials, only 37
farmers in Pante Piyeue fulfill the above characteristics, so the number of samples in
this study are 37 farmers.
3.2 Data Analysis Methods
This study uses DEA analysis tools in analyzing data with DEAP 2.1, and uses the
Variable Return to Scale (VRS) approach which is oriented on the input approach. The
results of the calculation of efficiency using DEA on the efficiency levels of
sharecroppers and landowner farmers in Pante Piyeue indicate that there are 11 efficient
sharecroppers from 19 samples, and there are 14 efficient landowner farmers from 18
samples.
DEA designed by Cooper, Seiford, and Tone (2000) aims to measure the efficiency
or productivity of a particular DMU (Decision Making Unit) (Ramanathan, 2003).
DEA is a methodology used to evaluate the efficiency of a decision-making unit
(work unit), which is responsible for using a number of inputs to obtain a targeted
output. DEA is a fractional programming model that can include many inputs and
outputs without the need for an explicit explanation of the functional relationship
between inputs and outputs.
The measurement of efficiency using the DEA method can be done by determining
the input and output variables and then determining the orientation of the model to
minimize input or maximize output. The relationship between input and output
variables, whether it is a Constant return to scale (CRS) or Return to scale variable
(VRS) is an important aspect of the DEA techniques. This research uses VRS.
3.3 Efficency Testing using Variabel Return to Scale (VRS) Approach
This approach assumes that the ratio between the addition of inputs and outputs is not
the same (variable return to scale). It means that adding inputs by n times will not cause
the output to increase by n times, and it can be smaller or greater than n times.
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Increasing the proportion can be increasing the return to scale (IRS) or can also be
decreasing return to scale (DRS).
The results of this model add a convexity condition for the values λ, by including
in the following limitation models:
=1
Furthermore, the BCC model can be written with the following equation: λ
Max π (Efficiency of DMU Model VRS)
Subject to:
∑
i = 1,2,....,m
∑
r = 1,2, ....,s
∑
≥ 1
j = 1,2,....,n
Where:
π = Effciecy of DMU Model VRS
n = Number of DMU
m = Number of Inputs
s = Number of Outputs
xij = Number of Inputs to-i DMU j
yrj = Number of Outputs to- r DMU j
λj = Weight of DMU j for calculated DMU
4 Results and Discussions
4.1 The Results of Data Analysis of Variable Return to Scale (VRS) –
Input Oriented of Sharecroppers
The following table presents the results of VRS-input-oriented data processing for 19
sharecroppers in Pante Pinuee.
Table 2. The Results of Data Envelopment Analysis (DEA) for Sharecroppers using a Return to
Scale Variable (VRS) Approach.
No Respondents Efficiency Levels
1. Umar 1.000
2. Harlini 0.600
3. Masyitah 1.000
4. Nursiah 0.808
5. Usman 0.990
6. Nazaruddin 1.000
7. Nilawati 0.965
8. Lindawati 1.000
9. Maulina 0.667
Technical Efficiency of Rice Farmers in Pante Piyeue
439
Table 2. The Results of Data Envelopment Analysis (DEA) for Sharecroppers using a Return to
Scale Variable (VRS) Approach (cont.).
No Respondents Efficiency Levels
10. Zuraida 0.737
11. Juliana 1.000
12. Amirullah 1.000
13. Nur Aini 1.000
14. Abdul Manan 1.000
15. Fatimah Zuhra 1.000
16. Raziah Hasyim 0.627
17. Muhammad Yusuf 0.882
18. Aurizawati 1.000
19. Marni 1.000
Average 0.900
Table 2 above shows that 11 sharecroppers in Pante Piyeue have been efficient in
the use of inputs, while 8 of them have not been efficient.
4.2 The Results of Data Analysis of Variabel Return to Scale (VRS) –
Input Oriented of Landowner Farmers
The following table presents the data analysis results of VRS - input-oriented for 18
landowner farmers in Pante Piyeue.
Table 3. The Results of Data Envelopment Analysis (DEA) of Landowner farmers using
Variabel Return to Scale (VRS) Approach.
No Respondents Efficiency Levels
1. Nur Wahidah 0.531
2. Nurdin 1.000
3. Muslem 0.531
4. M.Yusuf 1.000
5. Sabidah 1.000
6. Salamiah 1.000
7. Halim 1.000
8. Iskandar 1.000
9. Nur Baidah 0.807
10. Ibrahim Ali 1.000
11. Safrina 1.000
12. Aminah 1.000
13. Zainab 1.000
14. Halimah 1.000
15. Aisyah 1.000
16. Wardiah 1.000
17. Sariyani 1.000
18. Heriyati 0.717
Average 0.916
The table above shows that 14 landowner farmers in Pante Piyeue have been
efficient in the use of inputs, and the rest 4 of them are inefficient in the use of inputs
because the value is <1,000.
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So, it concludes that the landowner farmers are more efficient in using their inputs
compared to the sharecroppers in rice farming in Pante Piyeu, Peusangan sub-district,
because of the 18 landowner farmers used as the respondents, 14 landowner farmers
are efficient, while from 19 sharecroppers used as the respondents, only 11
sharecroppers are efficient.
4.3 Discussions
The table above shows the results of DEA efficiency calculations, and the following
presents how to handle inefficient inputs to be efficient. For example, Harlini has not
reached an efficient scale due to the use of inputs that have not been maximized, so that
the resulting output is also not optimal.
Table 4 below shows the efficiency level of Harlini based on each input variable
used in rice farming.
Table 4. Original Value, Target, Radial Movement, and Slack Movement of inefficient Input-
output of Harlini with an efficiency level of 0.600.
Variables Original
values
Target
values
Radial
movements
Slack
movements
Production 2400.000 3400.000 0.000 600.000
Urea Fertilizer 50.000 30.000 -20.000 0.000
NPK Fertilizer 50.000 30.000 -20.000 0.000
SP-36 Fertilizer 50.000 10.000 -20.000 -20.000
Insecticide 284.000 84.000 -113.600 -86.400
Seed 20.000 10.000 -8.000 -2.000
Source: Results of data analysis, 2019
Table 4 above explains that the use of the input of Harlini has inefficiencies in all
inputs that consist of urea fertilizer, NPK fertilizer, SP-36 fertilizer, insecticide, and
seeds.
The first and second input variables are urea fertilizer and NPK fertilizer that have
the original value of 50 kg with the target value of 30 kg. It appears that the original
value is higher than the target value. Therefore, to make the use of urea and NPK
fertilizer more efficient, the use of fertilizer must be reduced by 20 kg with a slack
movement of 0.
The original value of the third input variable is SP-36 fertilizer of 50 kg and the
target value of 10 kg. So, to make more efficient use of SP-36 fertilizer, it must be
reduced by 20 kg.
The fourth input variable is an insecticide that has the original value of 284 ml and
the target value of 84 ml. It shows that the original value is higher than the target value.
So, to make the use of the insecticide more efficient, it must be reduced by 113.6 ml.
The fifth input variable is the seed that has the original value of 20 kg with the target
value of 10 kg. It appears that the original value is higher than the target value. So, to
make the use of seeds more efficient, it must be reduced by 8 kg.
Technical Efficiency of Rice Farmers in Pante Piyeue
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5 Conclusions & Suggestions
5.1 Conclusions
Based on the results of previous studies and discussions, the conclusions of this study
are as follows:
Farmers are categorized as technically efficient if they are able to use minimal input
to obtain maximum production output. The average value of the technical efficiency of
37 farmers used as the respondents is 0.908. It means that 25 rice farmers in Pante
Piyeue have been technically efficient, or 68% of the total respondents.
Based on the output target produced, the landowner farmers get more efficiency
level, where 14 respondents have been technically efficient. While sharecroppers, only
11 respondents are technically efficient. The differences in the level of efficiency
obtained are due to differences in the use of inputs or production facilities used, and the
use of production facilities that are not yet on targets, such as excessive use of
fertilizers, insecticides, and seeds.
5.2 Suggestions
Based on the results of the study, several suggestions can be put forward:
1. It is expected that respondents who have not reached the level of efficiency to
pay more attention to the use of production facilities, such as fertilizers,
insecticides and seeds that must be on time and on target, because using the
production facilities on time and on target will increase rice production yields,
for farmers who have not technically efficient can reduce the use of excessive
input in order to achieve efficiency scale.
2. To increase agricultural production results, the Government intervention in
agricultural extension is necessary so that farmers are more efficient in using
seeds, fertilizers, and insecticides.
3. For further researchers, they can use other variables of production facilities,
increase the number of villages and use more diverse methods and approaches
to obtain the results of an assessment of the level of efficiency of rice farming,
which is more diverse and more detailed.
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