Optimality of Input Used, Input Demand and Supply Response of Rice Production: Experience in MADA Malaysia

Abstract

This study attempts to measure the optimum use of production inputs and analyze the behavior of input demand and output supply of rice production in MADA, Malaysia. Restricted normalized transcendental logarithm profit function is utilized as it is able to depict the behaviour of input demand and output supply simultaneously. The findings indicate that farmers in MADA were not utilizing the production inputs optimally.  Fertilizer prices and area planted had a significant effect on the profit, and farmers are responsive to the changes of input prices in term of input demand behavior. Thus extension with regards to the optimal input used should be emphasized in order to improve the economic efficiency and the profitability of the rice production.

Keywords: Optimum input used, Input demand, Output supply, Rice