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Total Factor Productivity Analysis of Oil Palm Production in Indonesia

Author

Listed:
  • Nunung Nuryartono

    (International Center for Applied Finance and Economics, Bogor Agricultural University, Kampus Baranangsiang, Bogor, Indonesia,)

  • Syamsul Hidayat Pasaribu

    (International Center for Applied Finance and Economics, Bogor Agricultural University, Kampus Baranangsiang, Bogor, Indonesia,)

  • Pristi Nadhilah Khairina Panggabean

    (International Center for Applied Finance and Economics, Bogor Agricultural University, Kampus Baranangsiang, Bogor, Indonesia.)

Abstract

Over the last few decades, Indonesian oil palm industry has grown significantly becoming a very important agriculture-based industry, where the country is today the first world's leading producer and exporter. Total factor productivity (TFP) is a framework that can be employed to analyze the source of economic growth. Using the data from the National Farmers Panel Data Survey for the year 2009 and 2012 in two observed districts respectively in Sanggau and Muaro Jambi district, the results of determinant factors analysis shows that Land, Pesticide, Fertilizer and Labor have significant contribution to total production of oil palm in both districts. On the other hand, based on accounting approach, the result reveals that TFP index values of the districts of Sanggau and Muaro Jambi respectively were 1.56 and 1.03. This study have important implications on how to facilitate the adjustment of small farmers to more efficient oil palm production.

Suggested Citation

  • Nunung Nuryartono & Syamsul Hidayat Pasaribu & Pristi Nadhilah Khairina Panggabean, 2016. "Total Factor Productivity Analysis of Oil Palm Production in Indonesia," International Journal of Economics and Financial Issues, Econjournals, vol. 6(4), pages 1570-1577.
    • Handle: RePEc:eco:journ1:2016-04-37
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    References listed on IDEAS

    as
    1. Tim Coelli & Sanzidur Rahman & Colin Thirtle, 2003. "A stochastic frontier approach to total factor productivity measurement in Bangladesh crop agriculture, 1961-92," Journal of International Development, John Wiley & Sons, Ltd., vol. 15(3), pages 321-333.
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    More about this item

    Keywords

    Oil Palm; Total Factor Productivity; Indonesia;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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