Efficiency differentials in the production of cocoa in West Malaysia / Nasudin Othman

This paper examines the efficiency differences among the individual cocoa producers in West Malaysia. Cross-sectional data collected from 260 cocoa smallholders were used for the study. Both the average production function estimated by the Ordinary Least Squares techniques and the frontier production function estimated by the Linear Programming methodology were employed in the analysis. The results indicated that technical inefficiencies were present in the study area. The study revealed that a large proportion of the farmers have output levels below their potential. For the least efficient farmers, the level of output could be increased by 34 per cent if they were to improve their management expertise or to improve the efficiency in the use of the available input factors.