Measuring technical efficiency of Malaysian paddy farming: An application of stochastic production frontier approach

Paddy farming is one of the most impodant activities in Malaysian agriculture sector. However, the actual yields of paddy in some of the states were recorded far less than the potential yield of paddy. This study investigated the level of techcal efficiency and the determinants of technical inefficiency for a sample of 230 paddy farmers operating in Penimular Malaysia by using a trm-log stochastic production frontier. The mean level of technical efficiency for the selected paddy farmers was estimated at 85.8%, whle the efficiency of the selected paddy farmers varied from 0.263 to 0.982. Inefficiency model indicated that the attendance at seminar or workshop significantly influenced techcal inefficiency. The attendance at seminar or workshop had become an ace factor in increasing technical efficiency and in increasing yield per hectare. Hence, h s study suggests that, the farmers should attend seminar or workshop of paddy farming from time to time. Encouraging paddy farmers to attend seminar or workshop can be achieved through offering incentives, subsidies in order to offset the oppodity cost of attendance at seminar or workshop. © 2012 Asian Network for Scientific Information.