Revealing the effect of agricultural interventions on technical efficiency: empirical evidence from Indonesian smallholder rice farmers

Abstract This study examines the impact of certified seed use and agricultural extension services on technical efficiency (TE), leveraging a panel dataset to track efficiency dynamics over time while accounting for unobserved heterogeneity. Using a stochastic metafrontier production function, our findings reveal that although certified seed users achieve slightly higher TE (0.762) than non-users (0.756), their lower metafrontier TE (MTE) (0.725 compared to non users: 0.743) suggests that adopting certified seeds alone is insufficient to bridge the technological gap. This highlights the need for a more comprehensive approach to technology dissemination. Significant determinants of inefficiency include education level of household head, row planting techniques, regional disparities, and the share of income earn from farming. Extension services emerge as a key driver of efficiency, not only enhancing TE but also significantly improving technological gap ratios (TGR) and metafrontier TE compared to non-beneficiaries. On average, beneficiaries exhibit TE, TGR, and MTE scores of 0.902, 0.902, and 0.818, respectively, whereas non-beneficiaries show corresponding average of 0.896, 0.854, and 0.763, respectively. This underscores the vital role of extension in equipping farmers with the knowledge and skills to optimize their practices. To maximize these benefits, strengthening seed supply chains and infrastructure is crucial to ensure farmers have reliable access to high-quality certified seeds. Additionally, expanding agricultural extension services—through increased funding, resource allocation, and tailored farmer support—will be instrumental in driving sustained improvements in farm efficiency and productivity.