The Scale Efficiency of Nile Tilapia Pond Aquaculture and Its Determinants in Tampaksiring District of Bali Province

Abstract

Aquaculture has been playing an increasingly significant role to the Indonesian economy as alternative livelihood, particularly to provide nutritious food and to improve the living standards of rural communities. Since rice farmers in Bali face the competition with imported rice in the market, income diversification through Nile tilapia aquaculture in a non-permanent pond has got increasing attention in recent years. However, farmers still face inefficiency in aquaculture practices due to production constrains and other socio-economic factors. The main objectives of this study are to analyze the scale efficiency and to determine the factors that influence the efficiency of Nile tilapia aquaculture. To achieve the objective, this study applied data envelopment analysis (DEA) and Tobit regression model. The results of DEA showed that the average technical efficiency and scale efficiency score of nile tilapia aquaculture were 0.97 and 0.98, respectively. Furthermore, there were several factors found to have affected the scale efficiency such as age of farmers, formal education, farming experience, distance of farmer’s pond to main road and the construction design of the pond. As the first study providing the evidence economic efficiency of nile tilapia pond aquaculture in Bali Province, this paper is expected to provide recommendations to support local farmers income diversification.

Keywords: Nile tilapia pond aquaculture, scale efficiency, data envelopment analysis, tobit regression