Measurement of Farm Level Efficiency of Beef Cattle Fattening in West Java Province, Indonesia

Abstract

This study was conducted to identify sources of technical efficiency among beef cattle farmers. This was investigated using the stochastic frontier production function which incorporates a model for the technical efficiency effect. Farm level survey data from 100 beef cattle farmers were obtained using well structured questionnaire. The parameters were estimated simultaneously with those of the model of technical efficiency effects. Asymptotic parameter estimates were evaluated to describe technical efficiency determinants by using the maximum likelihood estimation technique. Result reveal a mean efficiency of 0,77 implying that output from beef cattle fattening could be increased by 23 percent using available technology. Results further reveal that education, experience, number of cattle ownership and credit have significant impact on technical inefficiency.

Keywords: technical efficiency, technical inefficiency, beef cattle fattening.