Factor Affecting Technical Efficiency of Smallholder Rubber Farming in Northeast Thailand

Abstract

With the increase of rubber production, Para rubber farmers in Northeastern Thailand have faced the limited physical and socio-economic conditions that have given rise to the improvement of technical efficiency. This study investigated the technical efficiency of Para rubber farmers. A multi-stage random sampling technique was used to collect cross sectional data on 300 farmers. The data was analyzed using descriptive statistics and stochastic frontier analysis. The results revealed that the variance of gamma and sigma squared of the frontier production function was significant at a level of p = 0.01. All inputs (except chemical fertilizer) are major factors that have influenced the changes in the output of Para rubber production. The mean technical efficiency index for the farmers was found to be 0.573 and the efficiency factors, which were comprised of age of farmers, education, gender and age of the rubber trees, were found to be the significant factors that affected the variation in technical efficiency among the farmers. The policy implication of the study is that technical efficiency of Para rubber could be increased by 42.7% by improving the use of available resources. Thus, the government should give more education about rubber production, including tapping trees and managing farms because this education will impact the knowledge that can be applied to farming techniques in order to enhance efficiency.