Technical efficiency and profitability of padi farmers in NKEA padi estate project, Muda Agricultural Development Authorithy (MADA) / Aliya Mohd Azizan

The assessment of efficiency in agricultural production determines the efficiency level of households in their farming activities. Most of the time, farmers in developing countries do not use all the potential technological resources hence making inefficient decisions in their agricultural activities. Therefore, this study is focused on assessing technical efficiency (TE) and the identification of some of the determinants of technical efficiency in Projek Estet Padi National Key Economic Area (NKEA), Muda Agricultural Development Authority (MADA). A total of 110 farmers had been interviewed using a structured questionnaire. The output orientation Data Envelopment Analysis (DEA) was employed for this purpose and it was found that the mean TE constant return to scale (CRS) in the study area was 81 percent while the TE variable return to scale (VRS) was reported at 83 percent. The study demonstrated that the most crucial factors having positive effects on technical efficiency levels were land, farming experience and training. Further, this study also focused on examining the profitability of the paddy farmers in the study area. It was found that the cost of paddy production per hectare per season was RM5158.20 and it was the total labor cost that constituted the biggest proportion of the overall cost of production. Apart from that, the benefit cost (BC) ratio of paddy production in this area was found at 1.40.