Assessing Production and Marketing Efficiency of Organic Horticultural Commodities: A Stochastic Frontier Analysis

Etty Puji Lestari (), Sucihatiningsih Dian Wisika Prajanti, Fauzul Adzim, Faizul Mubarok and Arif Rahman Hakim
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Etty Puji Lestari: Department of Economics, Universitas Terbuka, Tangerang Selatan 15418, Indonesia
Sucihatiningsih Dian Wisika Prajanti: Department of Economics, Universitas Negeri Semarang, Semarang 50229, Indonesia
Fauzul Adzim: Department of Economics, Universitas Negeri Semarang, Semarang 50229, Indonesia
Faizul Mubarok: Master of Management, Universitas Terbuka, Tangerang Selatan 15418, Indonesia
Arif Rahman Hakim: Postgraduate School, Airlangga University, Surabaya 60115, Indonesia

Economies, 2024, vol. 12, issue 4, 1-14

Abstract: Inefficiency is a problem in the production process, including in the organic farming sector. Over a long term period, this problem can disrupt the productivity of agricultural crops. This research aims to analyze the production and marketing efficiency of organic cabbage farming in the Kopeng agropolitan area, Indonesia. We utilized a Cobb–Douglas production efficiency analysis with the Stochastic Frontier Analysis (SFA) approach. The variables in this study include organic cabbage production, land area, seedlings, organic fertilizers, organic pesticides, and labor. We conducted in-depth interviews with 60 organic cabbage farmers in Kopeng, Indonesia, from January to August 2023. The research results showed that organic cabbage cultivation was economically inefficient in production, technical, and marketing. The use of organic fertilizers, the ability to diversify products on limited land, and the use of pesticides, have not been utilized optimally yet. The results of the marketing efficiency analysis showed that it was efficient. Organic plants were believed to have their market share and to have a higher selling value than non-organic ones. The implication was that the government needed to provide training in producing organic fertilizers and pesticides to reduce production costs so that organic farming could be technically and financially efficient. This research enriched the discussion regarding the need to analyze production and marketing efficiency to find strategies to increase organic cabbage productivity.

Keywords: technical efficiency; Cobb–Douglas production function; farmer; cabbage farming; land area; fertilizers; labor (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2024
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