Cost efficiency on maize production under contract farming in Kedah / Aimi Adam

The state of Kedah is also one of the maize growing states but not produce more production like Perak, Johor and Sarawak (Department of Agriculture, 2018). Less production could be improved through enhancing the efficiency of inputs. Thus, this study is undertaken to estimate the cost efficiency of maize farmers in the study area of Kedah. The primary data were collected from 30 maize farmers from 6 districts in Kedah during March–May 2020 for the cropping year 2019–2020. Accordingly, this study was conducted using Data Envelopment Analysis (DEA) to estimate the level of Cost Efficiency (CE), of the maize farm under contract farming in Kedah as well as Tobit model to identify determinants affecting this efficiency. The mean of CE was 0.458. The mean CE implies that there exists possibility to increase production by 54.2%. The finding revealed high inefficiency among maize farmers. The Tobit model results revealed that farming experience and farm size, had a significant effect on CE. Farming experience show negative sign and significant at 10% level while farm size is found to be positive sign and significant at 5% level influencing CE. In conclusion, the findings of from this study have leads to detection of cost inefficiency among the farmers and there needs more improvement to increase efficiency of maize production. This study could produce significant knowledge and guidance to the contract farmers under FAMA in Kedah, planners of agriculture policy makers and agencies of government to in the effort to improve the cost efficiency levels of maize production in Kedah.