Abstract

The present study examined the economic efficiency of rubber smallholders in Peninsular Malaysia in a disaggregated form using Banker Charnes and Cooper (BCC) and Charnes Cooper and Rhodes (CCR) models of data envelopment analysis (DEA) as well as their respective bootstrap techniques. Multistage data collection was employed on 327 smallholders among 5 districts of Negeri Sembilan state. However, only 307 observations were used in computing inferential statistics, because the young-age category has been removed. The districts include Seremban, Tampin, Rembau, Kuala Pilah and Jempol. The results revealed that, the mean technical efficiency (TE) under variable returns to scale (VRS) and constant returns to scale (CRS) were 0.95, 0.97 0.96 and 0.45, 0.61, 0.33 for the all-age, matured-age and old-age crops respectively. The findings of the result also disclosed that naïve DEA has higher mean scores than bootstrappedDEA, thus indicating the presence of bias in the former and absence of bias in the later. Also, the efficiency determinants under VRS and CRS as well as their respective bias-corrected (BC) efficiency scores were also analyzed using Tobit regression analysis against the 15 sociodemographic factors. It was found out that critical factors, common to all the age-categories, include educational level, tapping system and marital status under VRS and BC-VRS assumptions, while under CRS and BC-CRS assumptions include race, tapping system, marital status and farm’s distance. Therefore, education of smallholders should be given more attention to increase efficiency. The study finally recommends that the traditional concept of computing efficiency or productivity of rubber and other perennial crops in an aggregated form should be complemented with the disaggregated form as this eliminates any bias and gives meaningful results. Improved methods such as bootstrapping should also be used as this only gives what is called bias-corrected efficiency scores. Regarding the determinants, factors such as education, tapping system and farm distance should be given more emphasis.

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