Technical Efficiency of Small Beef Cattle-Fattening Production in Muaro Jambi District, Jambi Province Indonesia

Abstract

Small beef cattle farming has not only important role to meet the need of meat in Indonesia, but also its important to life of 5,736 million farm households in Indonesia. Population of beef cattle by tenure based on national data in 2011, there were 10.96 million heads (73.95%) owned and operated by farmer and remains 4.34 million heads (26.04%) operated by other parties (PSKS, 2011).  This study investigated the level of technical efficiencies and the determinants of inefficiency among Bali cattle (Bos sondaicus) fattening farm which rearing by farm-household owner and tenant under the system of share cattle-fattening (Gaduhan Ternak) in Muaro Jambi District, Jambi Province. Structured questionnaires were used to collect data from 34 owner and 40 tenant farm-households, which was selected by purposive sampling method. Sample of cattle fattening farm households had been analyzed with Stochastic Frontier Production function with Maximum Likelihood Estimate Method. The results of the study showed that the estimated level of technical efficiency of production on cattle fattening operated by owner were 0.789, while by tenant livestock were 0.631. Inefficiency model of cattle fattening operated by owners, indicated that: 1) fattening period and 2) age of the farm household's head had positive significant effects on technical efficiency. The other results show that: 1) age of farm household head's, 2) education level of farm household head’s and 3) both the livestock share arrangement (on 70:30 basis and on 60:40 basis of produces); had significant and positive impact on technical efficiency, while 1) share food crop income to farm household incomes and 2) labor wage had significantly negative impact on inefficiency model of cattle fattening operated by tenants. Nevertheless, there are existences of inefficiency for both farm household owner and tenant livestock, but there are the ample opportunities to increase of productivity through improvements in their technical efficiency primary by increasing the number of forages.

Keywords: share cattle-fattening, technical efficiency, beef cattle