Estimating technical efficiency and its determinants in Indonesian smallholder brackish water aquaculture

Brackish water aquaculture, despite small landholdings and simple technologies, plays a crucial role in sustaining coastal rural economies, particularly for low-income households. As resource scarcity intensifies, improving production efficiency becomes crucial. This study assesses the technical efficiency of smallholder brackish water aquaculture and identifies key determinants of inefficiency using Stochastic Frontier Analysis with heteroskedastic inefficiency and noise components. Results indicate that landholding size, seed, feed, additives, fuel, electricity, and labor significantly enhance production, while pesticide use reduces it. Farmers adopting improved water management achieve higher production potential, with river-sourced freshwater frontiers being slightly more stable and consistently higher than alternative sources. The mean technical efficiency is 0.711, with larger farms performing better. Higher education, farming experience, and pond accessibility reduce inefficiency, whereas self-financing capacity and strong farmer group support in assisting members in obtaining quality seed enhance efficiency. Farms relying on permanent workers for daily management show lower efficiency. These findings underscore the importance of water management and institutional support through farmer groups for enhancing aquaculture productivity. • Average technical efficiency is 0.71; water management, quality seed access, and farmer groups are key efficiency drivers.