Technical Efficiency of Smallholder Sugarcane Farming in the Plant Cane Category on Dry Land in the Working Area of Ngadiredjo Sugar Factory, East Java Province

Danang Permadhi, Sahrul Dwi Riyadi, Nuhfil Hanani, Fahriyah Fahriyah

Abstract


This study aims to analyse technical efficiency (TE) of smallholder sugarcane farming, factors affecting of TE, and farm profitability using the Profit-Sharing System (SBH) and Sugarcane Purchasing System (SPT) partnership schemes. The research location is in the Ngadiredjo Sugar Factory work area. Research methodology using DEA, Tobit regression, and sugarcane farming analysis in each partnership scheme. The results of the analysis showed that the average TE value of smallholder sugarcane farming on dry land is 0,91 (91%) and still had the potential to be increased by 0,9 (9%). Factors that influence the TE level are the role of the Ngadiredjo Sugar Factory in developing its partner farmers. The average income and RC ratio value (actual and target) obtained (after efficiency) in the SBH partnership were respectively IDR 13.44 million/ha and IDR 18.07 million/ha, while in the SPT partnership they were respectively IDR 2.69 million/ha and IDR 7.3 million/ha. The RC ratio value of existing smallholder sugarcane farming (actual) is 1.18. While in the SPT partnership scheme the RC Ratio value is 1.03. Based on the value of income, RC ratio, and sugarcane farming assumption used the SBH partnership is better than the SPT partnership scheme.


Keywords


Sugarcane; Technical Efficiency; DEA; Profitability;

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DOI: https://doi.org/10.21107/agriekonomika.v15i1.30209

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