Technical efficiency and resource use in the production of cocoa in West Malaysia

O. Nasuddin

Abstract

This study examines the technical efficiency and the intensity of resource use in cocoa production at the smallholders’ level in the region of Hilir Perak. The results indicated that the majority of farmers were technically inefficient in cocoa production. A large proportion of the farmers were found to have output levels below their potential. The outcomes of the study also showed that there were variations in the use of farm resources among the various groups of farmers. The efficient farmers used more land and less labour than the least efficient group. The study also discovered that there existed a positive relationship between technical efficiency and profitability. The most efficient farmers have double output per man over the amount received by the least efficient group. The findings from this study imply that there is scope to narrow the gap by identifying the less efficient farmers and to further investigate the reasons for their poor performance.

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