Abstract

This study estimated economic efficiency among oil palm smallholders according to crop age in Johor Malaysia. We employed multistage sampling technique to collect data from 450 smallholders randomly selected under three crop age categories from (10) production units using structured questionnaire in State of Johor Malaysia. Data were analyzed using descriptive statistics, DEA, ANOVA and Tobit regression analysis. The result indicates that smallholders were operating at low levels of economic efficiency and they experience higher cost of production per unit of output and as a result narrow their chances of maximizing profit. The finding further shows that there was significant difference at 1% levels in economic efficiency among the oil palm smallholders according crop age in the study area. The age of farmer squared, household size, access to credit facilities, pests and weed control method, land clearing and replication of pesticides application were positive and significant at 1%, 5% and 10% respectively. Furthermore, age of farmer, membership of smallholders association, off-farm income, fertilizers used and oil palm income were negative and significant at 1%, 5% and 10% levels respectively. The study recommends policies that would improve the quality of adult extension education program to educate smallholders on how to use the combinations of farm resources appropriately that can minimize cost of production.

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