Determinants of Technical Efficiency among Rubber Smallholders Production in Lipis, Pahang: a Cobb Douglas Stochastic Frontier Production Approach

This study highlights the technical efficiency of crop production as an important aspect of pursuing output growth in agriculture and smallholder farming. Using a randomly selected sample of 370 rubber smallholders in Lipis, Pahang, Malaysia, a stochastic frontier production model was applied, using the Cobb-Douglas production function to determine the production elasticity coefficients of inputs and technical and the determinants of efficiency. The study reveals that rubber production responds positively to an increase in fertilizers, planting areas, and tapping areas. The study also found that respondent status, land ownership status, and education (primary school) were significant determinants of technical efficiency. The technical efficiency analysis reveals that the current level of efficiency among rubber smallholders is about 70% and suggests that opportunities still exist for increasing technical efficiency among smallholders through better use of existing resources and technology. The results highlight some recommendations for improving efficiency through knowledgeable extension agents, good agricultural practices which are weeding and fertilizing, and good clones recommended by Malaysia Rubber Board should be selected.