Effect of Institution on Production Cost Efficiency of Organic Rice Farming in Indonesia

Authors

Ignatius Suprih Sudrajat, University of Sarjanawiyata, Indonesia & Sebelas Maret University of Surakarta, IndonesiaFollow
Endang Siti Rahayu, Sebelas Maret University of Surakarta, Indonesia
Kusnandar Supriyadi, Sebelas Maret University of Surakarta, Indonesia

JEL Classification System

Q1, Q12

Abstract

This study is about the effect of an institution on the production cost efficiency of organic rice farming. This research used the stochastic frontier approach with cross-section data and estimated with maximum likelihood estimation (MLE). This study aims to determine the effect of institution variables on production cost inefficiency. A survey was conducted on 216 organic rice farmers during two planting seasons using purposive sampling method in Dlingo Village, Mojosongo, Boyolali, Central Java, Indonesia. The result of the research shows that the average value of production cost efficiency is 0.4268. The role of farmer groups and agricultural counselors is the most dominant variable in determining the production cost inefficiency of organic rice farming.

Recommended Citation

Sudrajat, Ignatius Suprih; Siti Rahayu, Endang; and Supriyadi, Kusnandar (2018) "Effect of Institution on Production Cost Efficiency of Organic Rice Farming in Indonesia," DLSU Business & Economics Review: Vol. 28: No. 1, Article 12.
DOI: https://doi.org/10.59588/2243-786X.1235
Available at: https://animorepository.dlsu.edu.ph/ber/vol28/iss1/12