Analysis of Profit Efficiency of Rice Farming in Solok Regency

Lailatul Rahmi, Lailatul Rahmi, Hasnah Hasnah, Yuerlita Yuerlita

Abstract


Abstract—Profit efficiency is a combination of technical and allocative efficiency which provides more information than other partial efficiency measurements and will determine future farming prospects. This study aims to (1) analyze the profit efficiency of rice farming in Solok Regency and (2) analyze the socio-economic factors of farmers influence the profit efficiency of rice farming in Solok Regency. This study was conducted in X Koto Singkarak District, Solok Regency in June-July 2024 using a survey method of 100 respondents taken by random sampling. Data were analyzed using the Cobb Douglas Stochastic Profit Frontier function using the Maximum Likelihood Estimation (MLE) approach. The results showed at a confidence level of 95%, seed prices and land rental cost have a positive effect on profits. NPK Phonska fertilizer prices, labor wages, and equipment depreciation costs have a negative effect on profits. Profit efficiency of rice farming in Solok Regency is 0.91 means rice farming has reached 91% profit from the maximum profit limit. Rice farming experience and farmer's formal education have a positive effect on profit efficiency of rice farming in Solok Regency. Increasing the profit efficiency of rice farming can be achieved by reducing the cost allocation for NPK Phonska fertilizer, labor wages, and equipment depreciation costs because the increase in the value of these variables leads to a decrease in rice farming profits. Farmer who are members of farmer groups are expected no to overuse fertilizer even though they get subsidized fertilizers in order to reduce production costs, increase profits, and increase the efficiency of rice farming profits.

Keywords— Productivity, Profit Efficiency, Rice Farming, Solok Regency, Stochastic Profit Frontier Cobb Douglas


Keywords


Profit Efficiency, Solok Regency, Productivity, Cobb Douglas Stochastic Profit Frontier, Rice Farming

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References


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DOI: http://dx.doi.org/10.52155/ijpsat.v50.1.6696

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