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How can the productivity of Indonesian cocoa farms be increased?

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  • Andras Tothmihaly
  • Verina Ingram

Abstract

This study investigates the Indonesian cocoa production to reveal the possibilities for poverty alleviation. We estimate, using 1,290 panel observations from 722 households and stochastic frontier analysis, the technical efficiency of cocoa production and disaggregate productivity growth. Our results indicate that the average efficiency of the cocoa farmers is 50%. Farmers' educational attainment and their experience in cocoa farming are significant factors increasing efficiency. We also find that the productivity of Indonesian cocoa farms increased by 75% between 2001 and 2013. Technical efficiency growth and the increased chemicals use supported by government subsidies were responsible for the majority of this gain. Furthermore, large distortions in input allocation were found. Hence, policies that encourage the efficient use of farm inputs would be highly beneficial. Weather‐ and pests‐induced volatility in cocoa production could be decreased by promoting agricultural research on drought‐ and disease‐resistant cocoa varieties (EconLit citations: D24, O13, Q12).

Suggested Citation

  • Andras Tothmihaly & Verina Ingram, 2019. "How can the productivity of Indonesian cocoa farms be increased?," Agribusiness, John Wiley & Sons, Ltd., vol. 35(3), pages 439-456, July.
    • Handle: RePEc:wly:agribz:v:35:y:2019:i:3:p:439-456
    DOI: 10.1002/agr.21595
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    References listed on IDEAS

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    1. Besseah, Felix A. & Kim, Sangho, 2014. "Technical Efficiency of Cocoa Farmers in Ghana," Journal of Rural Development/Nongchon-Gyeongje, Korea Rural Economic Institute, vol. 37(2), pages 1-24.
    2. Andras Tothmihaly, 2017. "How low is the price elasticity in the global cocoa market?," GlobalFood Discussion Papers 258587, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    3. Agom, Damian Ila & Ohen, Susan Ben & Itam, Kingsley Okoi & Inyang, Nyambi N., 2012. "Analysis of Technical Efficiency of Smallholder Cocoa Farmers in Cross River State, Nigeria," International Journal of Agricultural Management and Development (IJAMAD), Iranian Association of Agricultural Economics, vol. 2(3).
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    2. Dalheimer, Bernhard & Parikoglou, Iordanis & Brambach, Fabian & Yanita, Mirawati & Kreft, Holger & Brümmer, Bernhard, 2024. "On the palm oil-biodiversity trade-off: Environmental performance of smallholder producers," Journal of Environmental Economics and Management, Elsevier, vol. 125(C).
    3. Marcomini, Gilson Rogério & Patino, Marco Tulio Ospina & Alam, Mohammad Jahangir, 2023. "Potato Production Strategies in Brazil: The Influence of Determinants of Technical and Economic Efficiency," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 11(2), April.
    4. Amr Khafagy & Mauro Vigani, 2023. "External finance and agricultural productivity growth," Agribusiness, John Wiley & Sons, Ltd., vol. 39(2), pages 448-472, March.
    5. Alexis H. Villacis & Jeffrey R. Alwang & Victor Barrera & Juan Dominguez, 2022. "Prices, specialty varieties, and postharvest practices: Insights from cacao value chains in Ecuador," Agribusiness, John Wiley & Sons, Ltd., vol. 38(2), pages 426-458, April.

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