TECHNICAL EFFICIENCY FOR RUBBER SMALLHOLDERS UNDER RISDA’S SUPERVISORY SYSTEM USING STOCHASTIC FRONTIER ANALYSIS

Abstract

Stochastic frontier analysis is applied in this study to investigate the relative performance of rubber smallholders in Besut District. The objective of this study is to identify and measure the performance of rubber smallholders under the supervision of the RISDA personnel. This form of top-down supervision is intended to improve smallholder’s productivity, efficiency and thus commercialisation prospect. A total of 35 rubber smallholders were investigated and, as expected, their performance varied signifcantly. 23% of the total cultivators achieved 0.95-1.00 technical efficiency score. The highest number of cultivators (25.7%) was in the category of 0.80- 0.85 technical efficiency score. The percentage of rubber cultivators achieving 0.80-1.00 technical efficiency score was larger than those scoring below the average category. About 8.6% of the total cultivators were in the lowest category of 0.60-0.65 technical efficiency score. Variations in tangible and intangible factors such as quantity of fertilizer application, husbandry practice, skill, motivation and experience of operators, management competence of the supervisors, soil fertility, species of the rubber trees and weather conditions might have contributed to this difference.