ekonomi mikro madya

7/25/2019 Ekonomi MIkro Madya

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COMPETITIVENESS ANCOST EFFICIENCY OF RI

FARMING IN INDONES

Source: Ern Journal of Rural Studies 51(2

150

Program Doktor Ilmu Pertanian

# $ % # & $ R ' Er% +


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1. INTROD CTIO &n &ndonesian a-riculture, rice is t.e /ost i/0ortant food cro0%

o e er, do/estic rice 0rice .as 3een .i-.er t.an t.e international rice 0rice since /id 2""" s e ce0tt.e duration of food crisis in 2""! and 2""6 under t.e current 0rotecti e rice 0olicy%

.is su--ests t.at if international trade of rice ill 3e li3eralized, self8 su9ciency ill not 3e ac.ie ed%

or t.e current &ndonesian rice 0olicies, suc. as 0rotection 0olicies, t.ere are so/e de3ates%

adi et al% (2""5), ata id;a;a et al% (2"12), &rianta (2""5), and estern econo/ists criticized t.e 0olicy 0ac?a-es, includin-i/0ort 3an, rice 0rocure/ent and stoc? reser e 3y @ +'B, in0ut su3sidy 0ro-ra/, and Ras?in 0ro-ra/%

.e fact t.at do/estic rice 0rice is al ays .i-.er t.an orld 0rice i/0lies t.at t.e &ndonesian ricesector does not .a e -lo3al co/0etiti eness%

&f &ndonesian Bo ern/ent /a?es a free trade a-ree/ent it. ASEA countries in t.e near future onsc.edule, it cannot .el0 li3eralizin- t.e strict current 0rotection 0olicy, suc. as i/0ort 3an ( one?ura,2"14)% &n suc. a situation, &ndonesia ill .a e to /a?e eCorts to en.ance t.e 0roducti ity of rice if ittries to en;oy t.e 3ene=ts of ree rade A-ree/ents%


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!"# O$%ECTIVES AND SIGNIFICANCE OF ST D

.ere are at least t.ree /easures to en.ance t.e 0roducti ity: irst is to i/0ro e tec.nical and allocati e e9ciency%

Second is to enlar-e far/ size to en;oy scale econo/y% .ird is to de elo0 ne tec.nolo-ies t.at en.ance 0roducti ity and 0ro=ta3ility%

&t focus on t.e 0ossi3ility of =rst /easure and in esti-ate .et.er t.e &ndonesian rice sectorcan i/0ro e t.e tec.nical and allocati e e9ciency and .et.er it can o3tain -lo3alco/0etiti eness 3y i/0ro in- t.e e9ciency%

.is 0resentation /a?es t o si-ni=cant contri3utions: irst, to t.e 3est of our ?no led-e, t.is is t.e =rst study t.at ai/s to e a/ine t.e i/0acts of

e9ciency i/0ro e/ent on t.e -lo3al co/0etiti eness of &ndonesian rice% Second, to /easure t.e cost e9ciency of &ndonesian rice 3y a00lyin- a stoc.astic frontier a00roac.

not usin- t.e 0roduction function /odel 3ut usin- a cost function /odel and 3y usin-


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&. ESTIMATION OF TEC'NICA( INEFFICIENCSING STOC'ASTIC FRONTIER COST F NCTION

.e costs of function is s0eci=ed as:

Table 1 presented the input prices and produper plot in the surveyed area.

The estimation result of CobbDouglas FronCost Function shown by Table .

!e estimate the CobbDouglas frontier costfunction with heteroscedasticity.


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Daria3le of land rent is si-ni=cantly 0ositi e in ort.Su/atra, >est Ja a, East Ja a, and Sout. Sula esi%

.e coe9cient of seed 0rice is si-ni=cantly 0ositi ein Sout. Sula esi%

.e coe9cient of la3or a-e is si-ni=cantly0ositi e in all re-ions% .e increase in la3or a-eleads to an increase in t.e total cost%

ertilizer 0rice are si-ni=cant 0ositi e in all re-ionse ce0t in >est Ja a and Sout. Sula esi%

.e tractor cost as also si-ni=cantly 0ositi e in allre-ions% Si/ilarly, t.e coe9cients of draft ani/alare si-ni=cantly 0ositi e in >est Ja a, East Ja a andSout. Sula esi%

.e coe9cients of irri-ation cost are si-ni=cantly0ositi e in >est Ja a, entral Ja a and Sout.Sula esi%

.e coe9cient of 0roduction is si-ni=cantly 0ositi ein all re-ions% .ese results su--est t.at anincrease in 0roduction increases t.e total cost%

.us, t.e esti/ation results are /ostly 0lausi3leand consistent it. t.e t.eory%

.e result of e9ciency analysis s.o s t.at a era-ecost e9ciency is "%4!4F ( ort. Su/atra), "%5!!1(>est Ja a), "%F557 ( entral Ja a), "%F142 (East

Ja a), and "%4G!2 (Sout. Sula esi), indicatin- t.at

t.e rice far/in- syste/ in entral Ja a .as t.e.i-.est cost


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o identify t.e deter/inants of cost ine9ciency, t.e follo in- re-ressioneHuation is esti/ated

The farm household characteristics used for estim" # are illustrated in Table $. The result of thedeterminants of cost inefficiency is presented in T


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.e a-e of .ouse.old .ead .asne-ati e eCect on ine9ciency in

entral Ja a and East Ja a%

.e older .ouse.old .ead is /oree 0erienced and a3le to /a?ee9cient decision on rice far/in-%

o e er, t.e esti/ated coe9cientof a-e of .ouse.old in Sout.Sula esi is si-ni=cantly 0ositi e%

.is see/in-ly contradicti e resultcan 3e e 0lained if youn-er.ouse.old .ead /ore ada0ta3le toacce0t and i/0le/ent t.e ne

inno ation tec.nolo-y of ricefar/in- t.at can ac.ie e .i-.e9ciency% &n Ja a, /any youn-0eo0le 0refer or?in- in citiest.an in t.e a-riculture sector%

.e education of .ouse.old .ead.as ne-ati e inIuence on t.eine9ciency of rice far/in- in East

Ja a% .e result indicates t.atfar/er .o .as .i-.er education

/3 f f /il / /3 0 iti C t


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.e nu/3er of fa/ily /e/3er .as 0ositi e eCecton t.e ine9ciency in ort. Su/atra and >est Ja a%

.e .ouse.old it. lar-er fa/ily /e/3er ill facet.e lar-er e 0enditure t.at /a?e t.e .ouse.olddi9cult to focus on rice far/in-% .e coe9cient ofty0e of 0addy land is si-ni=cantly ne-ati e in >est

Ja a% &f t.e far/ers can utilize /ore de elo0edirri-ation syste/, ine9ciency ill 3e reduced% .isis 3ecause far/ers can /ana-e 0addy in a 3etter/anner if t.e irri-ation syste/ is i/0ro ed(#ul anyi et al%, 2"11)%

.e location of land also .as ne-ati e inIuence ont.e ine9ciency of rice far/in- in East Ja a% &f t.elocation of t.e far/ land is t.e sa/e illa-e it.t.e far/er s .ouse, t.e far/er can /ana-e t.erice far/in- /ore easily%

.e land o ners.i0 .as 0ositi e eCect onine9ciency in all re-ions, e cludin- East Ja a% .isis .i-.ly related to t.e 3e.a ior of far/ers in t.estudy area .ere far/ers .o rent land .a e.i-.er /oti ation and 0roducti ity co/0ared tot.e o ned land far/ers% .is =ndin- is inaccordance it. t.at in entral Ja a 3y u?ui et al%(2""2) t.at t.e 0roduction e9ciency undertenancy land is not lo er t.an t.at of t.e o nedland%

'C8far/ occu0ation does not .a e an eCect on t.ecost ine9ciency of rice far/in-% .e esti/atedcoe9cients of far/ size are si-ni=cantly ne-ati ein >est Ja a, East Ja a and Sout. Sula esi% .eses.o t.at t.e lar-er far/ size ill increase t.e

e9ciency of rice far/in-% .e esti/ated coe9cient of 0lot nu/3er in entral Ja a is si-ni=cantly 0ositi e% .is su--ests t.e


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). MEAS REMENT OF DRC AND ESTIMATION OIMPACTS OF TEC'NICA( EFFICIENCY ON DRCS

Esti/atin- t.e relations.i0 3et een t.e co/0etiti eness of rice and t.ecost e9ciency of rice far/in-, t.e linear re-ression analysis it. t.esi/0le re-ression /odel as a00lied as follo :

.e data descri0tion and esti/ationresult of t.e re-ression analysis3et een t.e co/0etiti eness of riceand cost e9ciency in rice far/in-are illustrated 3y a3le 5 and F%


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.e R is t.e ratio oft.e cost in do/esticresources andnontraded in0uts( alued at t.eir s.ado0rices) of 0roducin- t.eco//oditydo/estically to t.e netforei-n e c.an-eearned or sa ed 3y0roducin- t.e -ood

do/estically%

R /easures .et.era co//odity is /ore0ro=ta3le .en0roduced do/esticallyor i/0orted% R 1indicates t.at t.eco//odity is /ore

0ro=ta3le .en0roduced do/esticallyK

The cost efficiency is negatively significant in influencing the


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The cost efficiency is negatively significant in influencing theDomestic &esource Cost "D&C# in all regions at 1' level. Thecost efficiency is negatively significant in influencing theDomestic &esource Cost "D&C# in all regions at 1' level. (fthe cost efficiency increases 1)'* D&C will decrease by+.$,' in -orth umatra* 1).,' in !est /ava* ,., ' inCentral /ava* +.0,' in ast /ava* and 0.%2' in outh

ulawesi.

The price inde3 is significantly affecting D&C in !est /ava*

Central /ava* and outh ulawesi. 4rice (nde3 in Central /avais negatively affected the D&C. !e do not have enoughinformation to e3plain the estimation results. 5owever* onepossible interpretation is that the former effect is smaller thanthe latter effect in Central /ava* because the D&C is greaterthan one there* while it is smaller than one in !est /ava and

outh ulawesi.

The variable of e3change rate is significantly positive to D&Cin Central /ava and ast /ava.

Further* as the pro3y of economy scale* the farm si6e isnegatively significant to D&C in all regions* e3cluding !est/ava.

To improve competitiveness* the farm household shouldenlarge their farm si6e. 5owever* the rice growing farmers7behavior in rural Central /ava and ast /ava show that usuallynot willing to sell their land "(wamoto and 5artono* ))0#.Farm si6e is not a new policy sub8ect for (ndonesia. The 9asic

:grarian ;aw imposed a limit in the si6e of agricultural landholdings* with a minimum and ma3imum si6e of and ) ha*respectively.


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*. CONC( SION AND RECOMMENDATION

irst, t.e 0roduction cost is 0ositi ely inIuenced 3y t.e in0ut 0rices, 0articularly t.e i/0acts of land rent, fertilizer0rice, and tractors cost on t.e 0roduction cost are t.e lar-est% .is i/0lies t.at t.e reduction of land rent, fertilizer0rice, and tractor cost are /ore eCecti e in decreasin- t.e 0roduction cost of rice far/ers%

Second, t.e cost e9ciency is t.e .i-.er in entral Ja a and East Ja a of .ic. t.e far/ size is relati ely s/all% .eo ners.i0 of 0addy land .as a ne-ati e eCect on cost e9ciency in ort. Su/atra, >est Ja a, entral Ja a, and Sout.Sula esi .ere s.are tenancy syste/ is idely o3ser ed, 3ut it does not .a e a si-ni=cant eCect on t.e cost e9ciencyin East Ja a% .is is not consistent it. t.at t.e results 3y Ja/al and e i (2""6) 3ut consistent it. t.ose 3y u?ui etal% (2""2)% #oreo er, t.is =ndin- i/0lies t.at land tenancy does not .a e ne-ati e eCects on cost e9ciency% .e/odern irri-ation syste/ .as a 0ositi e eCect on cost e9ciency in >est Ja a, entral Ja a and Sout. Sula esi 3ut notin t.e ot.er 0ro inces%

.ird, t.e rice far/in- in entral Ja a and East Ja a, .ic. are t.e /ain rice 0roducin- areas do not .a e aco/0arati e and co/0etiti e ad anta-e%

ourt., t.e co/0etiti eness of rice is 0ositi ely inIuenced 3y t.e cost e9ciency of rice far/in-% &f t.e cost e9ciency

increases 3y 1"M, R ill decrease 3y F%G5M ( ort. Su/atra), 1"%5M (>est Ja a), 5%52M ( entral Ja a), F%65M (East Ja a), and 6%47M (Sout. Sula esi)% o e er, e en if rice far/in- in entral Ja a and East Ja a can ac.ie e t.e 3estcost e9ciency, rice sectors in t.ese areas cannot o3tain -lo3al co/0etiti eness%

ift., t.e far/ size .as a 0ositi e eCect on co/0etiti eness%


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ro/ t.ese =ndin-s, e can dra so/e 0olicy i/0lications%

&n order to ac.ie e food security, .ic. is one of t.e ?ey strate-ic 0olicies under t.e 0ressure of tradeli3eralization, &ndonesian -o ern/ent ill .a e to refor/ t.e current 0rotecti e rice 0olicies%

.e results of in esti-ation i/0ly t.at if it li3eralizes t.e rice 0olicy, rice far/ers in t.e /a;or rice -ro in-areas, suc. as entral Ja a and East Ja a ill .a e t.e lar-est ne-ati e eCects 3ecause t.ey do not .a e-lo3al co/0etiti eness due to 0etty far/ size% And t.e 0olicies for t.e i/0ro e/ent of cost e9ciency arenot su9cient for t.e/ to ac.ie e -lo3al co/0etiti eness%

or t.e 0ur0ose of ac.ie in- -lo3al co/0etiti eness in entral Ja a and East Ja a, -o ern/ent needs toi/0le/ent so/e 0olicy /i , .ic. ai/s not only to decrease t.e cost ine9ciency 3ut to facilitate ricefar/ers to enlar-e t.e far/ size% o i/0ro e t.e cost e9ciency, i/0ro in- t.e irri-ation conditions andland consolidation are eCecti e%

o enlar-e t.e far/ size, facilitatin- transaction in land rental /ar?et ill 3e /ore feasi3le t.an 0ro/otin-land transaction t.rou-. 3uyin- and sellin- in rural entral Ja a and East Ja a 3ecause rice -ro in-far/ers are usually not illin- to sell t.eir land (& a/oto and artono, 2""6)%

o e er, t.e construction of an irri-ation syste/ and land consolidation is e 0ensi e, and cost0erfor/ance /ust 3e e a/ined%

i-. transaction cost in t.e land rental /ar?et of rural entral Ja a and East Ja a .ere lar-e sur0lusla3or still e ists, t.ere /ay 3e o3stacles to facilitate rentin- land%

.us, it is not so easy for &ndonesian -o ern/ent to de ise eCecti e 0olicy /easures for reducin- t.e cost

ine9ciency and i/0ro in- -lo3al co/0etiti eness in t.e rice sector% &t /ay .a e to do it to o erco/e t.isdi9culty%

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