The Efficiency of Smallholder Rubber Plantations and the Factors That Influence It: A Case Study in Indonesia

Abstract

Rubber has an essential role in supporting the people's economy in Indonesia, but lately, rubber production has continued to decrease. One of the efforts that significantly affected rubber productivity was a more efficient allocation and use of resources. This effort had to be supported by solid empirical knowledge regarding the technical efficiency of production and resource allocation. The efficiency of smallholder rubber plantations helped increase per capita income in rural areas. This study aimed to evaluate the efficiency level of smallholder rubber plantations and suggest several priority areas to increase the efficiency of smallholder rubber production. This study used 318 families of rubber farmers (15% of rubber farmers). Data collection used a questionnaire. This study analyzes the efficiency of smallholder rubber plantations in Indonesia using the Data Envelopment Analysis (DEA) approach. The results show that most smallholder rubber plantations operate in relatively inefficient conditions. The average technical efficiency (TE) and allocative efficiency (AE) of smallholder rubber plantations were 0.791 and 0.473, respectively. This implies an opportunity to increase the TE and AE of smallholder rubber plantations. Increasing the efficiency of smallholder rubber plantations can be done by adopting the best technology available and by increasing the efficiency of resources owned by farmers, such as land, clonal planting materials, and fertilizers. Clonal planting materials, education, agricultural counseling and training, access to credit, market access, experience in rubber farming, and the gender of the plantation manager determine the efficiency of smallholder rubber plantations. Improving the ability of rubber farmers can be done through counseling and training. It is also necessary to develop credit programs that are more accessible to farmers. Future research can be directed to analyze the technology used and the contribution of women to smallholder rubber plantations which are efficient versus inefficient in increasing the productivity of smallholder rubber.