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The 4th International Conference on Sustainability Agriculture and Biosystem IOP Publishing
IOP Conf. Series: Earth and Environmental Science 1059 (2022) 012078 doi:10.1088/1755-1315/1059/1/012078
Econometric modelling for estimating of paddy yield and rice

production in Melaka, Malaysia
Shahidan M S1, Fatah F A1, Lim H E2

1
Faculty of Plantation and Agrotechnology, Universiti Teknologi MARA, Cawangan
Melaka Kampus Jasin, 77300 Merlimau, Melaka, Malaysia
2
School of Economics, Finance and Banking, College of Business, Universiti Utara
Malaysia,06010 Sintok, Kedah, Malaysia
Corresponding author’s email address: fazleen5201@uitm.edu.my
Abstract. Melaka's rice industry exhibited a slightly poor performance between 1988 and 2019.
The paddy parcel area has decreased from 10,418 ha to 1,837 ha in 32 years. Between 1988 and
2015, the crop intensity factor (CIF) was below 50%. Thus, this research will examine the trend
of paddy yield and rice productivity in Melaka from 1988 to 2019 and estimated yield and rice
output for 2020 to 2030. This study applies production theory. Data were analyzed using multiple
regression with OLS estimation. The findings showed that Melaka paddy production reduced
during 1998-1999, 2004-2005 and 2008-2009 due to Asian crisis and global financial crisis. The
forecasting study used a 95% confidence range for the average growing rate. Even though paddy
output increased by 24.6 percent, the amount forecasted for high paddy yield and rice production
in 2030 is unachievable due to high agricultural land needed. Nevertheless, the nuclear paddy is
expected to produce more paddy and rice in 2030 than present varieties. Thus, the government
should support the development of nuclear paddy varieties, as well as expand paddy parcel area
in Melaka. This will assist Malaysia achieve its food security goal of 75% rice self-sufficiency
level in the Twelfth Malaysia Plan 2021-2025.
Keywords: agriculture, paddy yield, rice production, forecasting, nuclear paddy
1. Introduction
The world has begun to face the Covid-19 outbreak in early 2020. This pandemic has caused a big
impact on the rice industry. CNBC newspaper reported that the coronavirus outbreak has caused the
price of rice in Asia to reach a seven-year high, as importers scramble to stockpile the grain and exporters
to reduce shipments [1]. The Ministry of Agriculture and Food Industry reported that Malaysia still has
enough rice for at least two and a half months after Vietnam banned exports to feed its people due to the
COVID-19 disease [2].
[3] reported there are 31 million rice consumers in Malaysia that represent 2.7 million of total rice
consumptions in 2016. However, Malaysia's rice output has been relatively constant in comparison to
other countries, which have been growing since 1990 [3]. In addition, Malaysia has failed to achieve all
the targeted self-sufficiency levels (SSL) for the past 54 years from 1966 until 2020 with the current
performance at 70.0% [4]. Malaysia currently has a National Food Security Action Plan 2021-2025 plan
Content from this work may be used under the terms of the Creative Commons Attribution 3.0 licence. Any further distribution
of this work must maintain attribution to the author(s) and the title of the work, journal citation and DOI.
Published under licence by IOP Publishing Ltd 1
to enhance Malaysia's rice self-sufficiency level (SSL) from 70% to 75% under the 12th Malaysia Plan
[5].
Melaka is among seven states in peninsular Malaysia that has zero paddy hectarage destroyed due to
animals, insects, weeds, diseases, flood, drought, lodge and others in 2015 [6]. However, Melaka is not
among the ten main paddy production granary areas. There are three main districts in Melaka for paddy
plantation areas which are Alor Gajah (422ha), Jasin (789ha) and Melaka Tengah (1,524ha). The main
paddy varieties in Melaka are MR 219 (260ha), MR 220 CL2 (1,569ha), MR 253(325ha) and MR 269
(580ha) [6]. According to [7], Melaka has 1,837ha of paddy parcel, which was the lowest hectare
recorded between 1988 and 2019. Melaka used to have 10,418ha parcel area in 1988 [8]. Melaka
harvested area in 2019 was 3,360ha [7]. That value was 183ha more than the harvested area in 1988
which was at 3,177ha [8]. Cropping intensity factor (CIF) means the percentage of parcel area utilization
during seedling activities as harvested area. The CIF value was less than 50.0% for the past 27 years
between 1988 and 2015 [6]. However, the value increased to 52.0% in 2016 onwards because the parcel
area left in 2016 was 3,414ha which then continuously decreased to 1,837ha in 2019. Melaka paddy
yield in 2019 was 9,323mt [7]. That value was 546mt more than the paddy produced in 1988 which was
at 8,777mt [8]. Paddy to rice conversion rate was constant at 65% from 1988 and 2019. Melaka rice
production in 2019 was 6,060mt [7]. That value was 355mt (5.86%) more than rice production in 1988
at 5,705mt [8]. These situations showed that Melaka has poor management and utilization capability
related to paddy agricultural area for the past 32 years. This problem will surely affect the total paddy
productivity in Melaka specifically and total Malaysia rice self-sufficiency level (SSL) generally.
Malaysia's nuclear agency has begun producing seeds of a high-yielding rice cultivar developed
using nuclear technology. The International Atomic Energy Agency (IAEA) and the Food and
Agriculture Organization of the United Nations (FAO) have assisted Nuclear Malaysia in developing
numerous better agricultural types, including this rice variant that is more resistant to climate change
[9]. This rice cultivar is known as NMR152, and it was developed in 2018 by Nuclear Malaysia using
plant breeding techniques. Dr Siti A'iasah Hashim, the Director-General of Nuclear Malaysia, stated that
the seeds can produce eight to ten tons of rice per hectare, compared to two to three tons using standard
seeds [10]. The NMR152 has the advantage of being able to tolerate drought and flooding, as well as
rice blast disease and high winds, due to its sturdy stem [10]. This product is expected to increase
farmers’ rice yields and the country's food security. The Department of Agriculture has acknowledged
the varieties and the Medan Chuping Jaya, Perlis, will host the agricultural trial project [11]. A Local
Verification Study (LVT) was undertaken in 2019 at different places in Changloon, Kedah, Tanjung
Karang, and Sekinchan, Selangor, and NMR152 consistently yielded an average of eight tons per hectare
in these areas [12]. Because fewer fertilizers and pesticides are used for this variety, cultivation costs
can be lowered by 5% to 10%. Kemubu Agricultural Development Authority (KADA) has also stated
that its pilot project will be commenced in June 2021 on six to ten hectares of land [13].
Econometrics is a branch of economics concerned with the application of mathematical statistics and
statistical inference techniques to the empirical assessment of connections posited in economic theory.
Commodity supply is influenced by pricing as well as external variables such as production costs,
weather, and agronomic considerations. Rice supply is often determined by market pricing and other
external factors such as paddy output (ton), paddy harvested area (ha), and paddy to rice conversion rate
(percent) [14]. This is supported by [15] argument that the supply in the crop model is determined by
the planted area and yield. [14] had conducted a study on an econometric model which was constructed
to forecast the long-term rice production performance of the state of Sabah, Malaysia using
Autoregressive Distributed Lag. They further found that, due to restricted land bank usage for paddy
agriculture, Sabah's rice self-sufficiency level (SSL) is expected to be about 38%. However, the scenario
projection findings suggest that expanding the paddy planted area would have a good influence on the
sector, and it is expected to attain 60% SSL by the end of 2024. [16] elucidated that Indonesia’s GDP
and the number of populations as the determining factors for total rice consumption while rice
production is determined by harvested area and seed planted for rice in Indonesia. The authors conducted
a study on forecasting of rice production and consumption in Indonesia using Ordinary Least Squares
2
(OLS) and Feasible Generalized Least Squares (FGLS) models. He found that, Indonesia will be self-
sufficient by 2028 onwards. Similarly, [17] conducted a study on impacts of climate change on paddy
production in Integrated Agricultural Development Area (IADA), West Selangor, Malaysia using log
Linear OLS regression model. He found that a temperature increases of 1% result in a 3.44% drop in
current paddy output and a 0.03% decrease in paddy yield the next season. However, a 1% increase in
temperature results in a 0.12% drop in current paddy production and a 0.21% decrease in paddy output
the next season.
The regression enables us to identify the determinants and quantify their effects which provide
valuable inputs for policy makers in future. Nevertheless, it appears that the regression analysis is yet to
apply into the paddy yield production in Melaka. Therefore, this study is purposely structured under
two main objectives. Firstly, to study the trend of paddy productivity in Melaka from 1988 to 2019.
Secondly, to estimate paddy yield and rice production in Melaka from 2020 to 2030. The researcher
hopes this study will be able to suggest possible alternative policies and strategies to the state
government or policymakers in order to improve and increase the supply of rice in Melaka, This would
thereby improve the state’s rice self-sufficiency in the future which is in line with the Twelfth Malaysia
Plan, 2021-2025.
2. Material and Methods
2.1 Theoretical background of OLS regression

Ordinary least squares are the most common kind of estimated method regression analysis. Ordinary
least squares (OLS) regression, in its various forms (simple regression, multiple regression, ANOVA),
is the most frequent linear model analysis in the social sciences [18]. It is also commonly used to
anticipate the value of one dependent variable using the values of two or more independent variables.
The OLS estimator is the best linear unbiased estimator when the errors are homoscedastic serially
uncorrelated, and the other classical linear assumptions are fulfilled. The probabilities calculated by
OLS are not limited to the unit interval, implying that heteroscedasticity occurs [19].
Multiple Linear Regression (MLR) is the term used when there are two or more independent
variables. Adding predictor variables to multiple regression typically demands bigger samples, however
in rare cases, adding predictors can reduce the sample size necessary [20]. There are four basic
assumptions behind the multiple regression model. First, the dependent variables and the independent
variables have a linear relationship. Second, the independent variables have a low correlation with each
other. Third, the observations are randomly chosen and separately from the population. Lastly, the
residuals should have a normal distribution with a mean of zero and a variance of one.
Yt =b0 + b1X1t + b2X2t + bk Xkt +et (1)
Suppose that the behaviour of y can be interpreted by the relationship y = f (X1, X2,..., Xk, ;β1, β2,...,
βk )+ e, where f is a well-defined function and,β1, β2,..., βk are the parameters that describe the position
and function of X1, X2, X3….Xk respectively. The term e denotes that the relationship between y and X1,
X2, X3, Xk is stochastic and not exact. When e=0, it is referred to as a mathematical model; otherwise,
it is referred to as a statistical model. The word "model" is used to refer to any mathematical
representation of a phenomenon. The study was conducted using an econometric model by [14] and
[16]. This study involved a regression model focusing on paddy yield productivity (PY) and a
mathematical equation on rice production (RPROD).
2.1.1 The Paddy Production

PYt =β0 + β1 HAt + β2 YEARt + β3 CIFt+ et (2)
where PY is paddy yield (mt), t is sample size, t: 1988. 1989, …, 2019, HA is rice harvested area (ha)
YEAR is time trend (1988=1, 1989=2, …, 2019=32), CIF is Cropping intensity Factor (%), Β is
Population parameters
3
2.1.2 Rice Production Formula

RPRODt= PDCRt * PYt (3)
where RPROD is rice production (mt), t is sample size, t: 1988. 1989, …, 2019, PDCR is paddy to rice
conversion rate.
2.2 Data collection

The main source of data collection in this study is secondary data. The parameter of data used are paddy
harvested area (ha), year, cropping intensity factor (%), parcel area (ha), rice production (mt), paddy to
rice conversion rate (%). Data were collected from 1988 to 2019 by reviewing the web and documentary
review, reports from related agencies and the previous research and study. The main source of data for
forecasting was collected from Paddy Statistics of Malaysia, Department of Agriculture 1988-2015;
Paddy Production Survey Report Malaysia, Main Season 1996-2009; Booklet Statistik Tanaman 2013,
2017, 2019, 2020; Agrofood Statistics 2016, 2018 and 2019.
2.3 Statistical Analysis

The data analysis was conducted using IBM SPSS 23 and Microsoft Excel. Those analyses as follows;
2.3.1 Descriptive Analysis. Descriptive statistics was used to describe the basic features of data from a
report. Descriptive statistics was done to measure the central tendency and variability (spread). Although
descriptive statistics can help to understand the characteristics of data, they cannot be utilized to create
inferences or predictions.
2.3.2 Multiple Regression Analysis. OLS regression is a statistical technique for evaluating the
relationship between one or more independent variables and one or more dependent variables.
Estimating the correlation involved minimizing the number of squares in the difference between the
actual and predicted values of the dependent variable, which is represented by a straight line. OLS linear
multiple regression is employed to predict dependent variables calculated at the interval or ratio stage.
The presence of autocorrelation in an OLS result also be assessed.
Firstly, the data were transformed into the natural log, according to the Cobb-Douglas production
function. A Cobb-Douglas production function simulates the connection between output and inputs
(factors). It is used to determine input-to-output ratios for efficient production and to estimate technical
progress in manufacturing techniques. This was done before calculating using multiple regression. The
regression analysis is used to look at the relationship between two or more variables. First, the researcher
checks all four assumptions for multiple regression. The data should be independent observation to each
other, normally distributed, linear relationship between X and Y and homoscedasticity. The
autocorrelation was determined by the Durbin-Watson statistic test.
2.3.3 Forecasting. The forecasting was done using the estimated multiple regression model. It based on
increasing rate of the values of independent variable by 95% confident interval that calculated based on
the data from 1988 until 2019. Thus, it includes values of lower boundaries (poor performance), mean
(average performance) and upper boundaries (best performance). Moreover, this study includes two
additional scenarios which are paddy yield increasing rate at 24.6% (PY 24.6%) and nuclear paddy (PN).
3. Results
3.1 Descriptive Statistic

Table 1 shows all variables have big range values. The values for Paddy Yield (mt) (PY), Rice area
harvested (HA) and Cropping Intensity Factor (%) or CIF are 11,710mt, 2974ha and 0.9148%
respectively.
4
Table 1. Descriptive Statistic for Paddy Yield equation

PY HA CIF
Observation 32 32 32
Minimum 2058 726 0.0402
Maximum 13768 3700 0.955
Mean 7456 2417 0.269
Median 7585 2392 0.176
Mode 2058a 726a 0.0403a
Standard Dev 2964 820 0.234
a: Multiple modes exist. The smallest value is shown
The minimum value for PY, HA and CIF was recorded in 1998. However, the maximum value for
PY, HA and CIF were recorded during 2016, 1990 and 2017 respectively. By looking at the high value
of standard deviation for all variables, one might conclude that the average distance between the mean
and each quantity are huge except for CIF. However, the coefficient of variation in term of mean of
those variables were less than one where as PY, HA and CIF were 0.398, 0.339 and 0.870 respectively.
Thus, no high dispersion found on these variables.
3.2 Multiple Regression Analysis

Several assumptions are supporting multiple regression must be reviewed to determine if prediction
errors are caused by data features that the regression model does not accept or by the absence of a real
link between the variables. There are four fundamental assumptions in which the data must be normally
distributed; X and Y have a linear relationship (Figure 1), the variance of residual is the same for any
value of X (Homodecasticity) (Figure 2), and observation is independent to each other (Table 2)
3.2.1 Normal Distribution. The normal P-P plot shows a nearly linear straight line that scattered around
the 45-degree line (see Figure 1). Thus, the estimated residuals of the estimated regressions (PY) is
approximately normally distributed.
Figure 1. Normal P-P Plot for Paddy Yield (PY)
5
3.2.2 Homoscedasticity. Figure 2 plots the standardized residual against the predicted dependent variable
to check the homoscedasticity graphically. From Figure 2, the data are scattered around the value of
zero, without displaying any patterns. Thus, there is no evidence of existence of heteroscedasticity in
the estimated models.
Figure 2. Plot of *ZRESID against *ZPRED for Paddy Yield (PY)

3.2.3 Collinearity Statistic. According to Table 2 all independent variables have a positive relationship
with PY and except YEAR. Positive coefficients indicate that when the value of one of HA or CIF
increases, the value of PY also tends to increase. Moreover, HA and CIF are strongly significant at 1%
level.
Table 2. Collinearity Statistic for Paddy Yield (PY)
Correlation
PY HA YEAR CIF
PY 1.000 0.935*** -0.087 0.704***
***Significant at 1% level
This result stresses that if the government wanted to increase paddy yield in Melaka, they must re-
look at increasing the harvested area and cropping intensity factor (%). In contrast, the year showed a
weak negatively impact on paddy yield from 1988 to 2019. This illustrated that the paddy yield is under
poor growth situation in Melaka. This could be acceptable because there is a constant trend of paddy
yield production from 1988 to 2019. For almost 32 years, Melaka paddy production in 2019 registered
at 9,323mt which was just a mere of 546mt more than paddy production in 1988 (8,777mt). Other
estimated factors, such as rainfall and fertilizer subsidies, are significant at the 5% significance level in
determining rice yield, but the sign for each variable carried the preceding connection [14].
3.2.4 Multiple Regression Analysis.Table 3 shows the results of the study which contains 32
observations covering the period of 1988 to 2019. The sample data provide sufficient evidence to infer
that the regression model fits the data better than the model with no independent variables since the F-
value is significant at 1% level.
6
Table 3. Result of Multiple Regression for Paddy Yield (PY)

Independent variables
Coefficient P-value Variance inflation
factor (VIF)
Intercept 1.113 0.526
HA 1.017 0.000*** 5.516
YEAR -0.007 0.926 3.823
CIF 0.081 0.486 7.143
F-VALUE 69.31***
R SQUARE (R2) 0.881
ADJ R2 0.869
OBSERVATION 32
DURBIN-WATSON d 1.683
***Significant at 1% level
The F-value of 69.31 implies that the between-group variation is 69.31 times the size of the within-
group variance. A high F-value graph implies that the group means are spread out more than the data
variability within groups. In this instance, it becomes more likely that the observed disparities between
group means represent population-level differences.
For linear regression models, R-squared is a measure of the goodness level of prediction. The model
R-square show a good goodness level prediction at 88.1%. This result is good because an extremely
high R-square value close to one will give problems. Therefore, this model can be used to predict paddy
yield for the next 10 years. In the least-squares regression models, Variance Inflation Factors (VIFs)
evaluate the correlation between independent variables. The VIFs value between 3.823 and 7.143 show
there is no serious multicollinearity because the value is less than 10. Multicollinearity occurs when
independent variables in a regression model are correlated. High multicollinearity is problematic since
independent variables should be independent.
The Durbin Watson (DW) d statistic is a test for autocorrelation in the residuals from a statistical
regression study. The value of the Durbin-Watson statistic will always be between 0 and 4. By referring
to the Durbin-Watson d statistic table (5 percent significance points of dl and du), positive
autocorrelation is defined as a number less than dl at 1.244, whereas negative autocorrelation is defined
as a value more than 1.650. The value considers as inconclusive if fall between 1.244 and 1.650.
Therefore, this study sample shows no evidence of autocorrelation as the value at 1.683.
The coefficients express the mathematical relationship that exists between each independent variable
and the dependent variable. The only harvested area (HA) seems to have linked with paddy yield at the
population level because of significant value. This is supported by [15] argument that the supply in the
crop model is determined by the planted area and yield. There might be an insufficient sample size of
CIF to make the data not significant because CIF has a strong positive correlation with PY. A positive
coefficient implies that the mean of the dependent variable tends to rise when the value of the
independent variable rises. A negative coefficient indicates that the dependent variable tends to drop as
the independent variable rises. All independent variables showed a positive coefficient with PY and
except for YEAR. So as the value of the harvested area, and crop intensity factor increase, then paddy
7
yield also will increase. In contrast, as the year increase by one unit, then paddy yield will decrease with
a very small value at 0.007. The coefficient data tell for every one-unit HA and CIF increase, then PY
will positively increase for 1.017 and 0.081 respectively. This result shows that the main factor that
needs to improve by state government if they plan to increase paddy productivity is the harvested area.
3.3 Forecasting
There was a big jump between value in 2019 and estimating value in 2020 for paddy yield and total rice
consumption. This could be due to the estimated values which are based on the mean regression.
Therefore, the researcher determined the increasing rate before adjusted the estimating value from 2020
until 2030. The forecasting model is as follows:
̂ ) =1.113+1.017 (HA)-0.007(YEAR)+0.081(CIF)
Paddy Yield (𝑃𝑌 (4)
3.4 Melaka Paddy Production from 1988 to 2019

Figure 3 shows the paddy parcel area has a decreasing trend from 1988 (10,418 ha) to 2019 (1,837ha).
Figure 3. Melaka Paddy Production from 1988 to 2019

The total reduction of parcel area was (- 82.4%). Since 1961, the land area used for rice cultivation
in Malaysia has increased dramatically, from 51,649ha in 1961 to a peak of 766,180ha in 1972 and has
been stable since then. However, paddy plantation land area has decreased from 716,873ha in 1980 to
698,544 ha in 2000 [21]. This could be a major issue in this country because rice is a staple food and
the population will keep increasing in future. The influence of development activities, which have led
to the reduction in rice production in Malaysia has led to a major declining of agricultural lands every
day [22]. This argument corroborates the finding made by [23]. Competitive pressures from the growing
industry have caused the size of agricultural land to shrink and become more constrained, which has a
direct influence on food security. According to a report by the Ministry of Agriculture, the availability
of agricultural land reserve has declined from 999,300ha in 2000 to 922,000ha in 2010. Food producing
land is expected to decline further, to around 841,000ha by 2020, as a result of the conversion of food
farming areas to oil palm plantations and the development of more residential and industrial sectors
[24].
Additionally, the harvested areas in Melaka show no movement for the past 32 years. Similarly,
Malaysia's rice harvested area also has been relatively constant in comparison to nations like Indonesia,
Thailand, Vietnam and the Philippines which has increased since 1990 [3]. Moreover, the lowest point
8
of the harvested area in Melaka was in 1998 at 729ha. The percentage of the parcel area utilizing as
harvested area or also known as cropping intensity factor (CIF) (%) between 1988 and 2016 ranged from
4.0% to 52.0%. The CIF was highest during 2017 at 95.5% because the parcel area left on that year in
only 1,837ha whereas there was a 3,414ha parcel area in 2016. Many factors contribute to land fertility
such as slope, rainfall, climate, labour force, machinery and buildings, stock of input and managerial
ability which may subsequently explain this reduction of the harvested area [25].
Paddy yield in Melaka also showed a constant trend for 32 years. Despite having fluctuated
movement from 1988 to 2019, the paddy yield recorded in 1988 and 2019 were 8,777mt and 9,323mt.
The paddy was increased by 546mt which was equal to 6.22%. Melaka was facing the biggest challenges
and difficulties from 1997 to 1998 and 2004 to 2005 as their paddy production was at the poorest for
the past 32 years. The instability of output figures and productivity levels are typically caused by a
variety of causes, including soil degradation, climate change, the occurrence of plant diseases and
epidemics, technology limitations, deterioration of agricultural infrastructure, and land use change [26]
. If this is connected to the phenomenon of paddy land use change, then each reduction in the size of
paddy land will always affect the decline in rice production.
Malaysian economy has undergone a substantial change as a result of the late 1990s financial crisis.
The findings showed that Melaka paddy production reduced during the period of 1998-1999, 2004-2005
and 2008-2009 due to Asian crisis and global financial crisis. The decline and fluctuation in the value
of the dollar as a result of the financial crisis has resulted in rising costs of imported agricultural inputs
and food from year to year, raising the cost of production in the agricultural sector [22]. This is support
by [27], as she mentioned apart from low paddy yield, the paddy sector is also dealing with growing
production costs as a result of reliance on imported inputs and rising labour wage rates. The total GDP
growth rate in 1998 was (–5.1) percent, while the food and agribusiness growth rate were 8.5 percent.
Another revelation was the hefty food import expense, which totalled RM12 billion in 1998. The food
import bill rose to RM13.9 billion in 2005 [15]. The import cost was not only large, but its composition
indicates Malaysia's strong reliance on feedstuff to maintain the livestock sector, as a result of the
country's failure to produce enough cereals for food and feed meal, dairy products, and meat.
3.5 Melaka Paddy Yield Estimation until 2030

Figure 4 shows the trend movement of paddy yield from 1988 to 2019 and forecasting of paddy
production between 2020 and 2030.
Figure 4. Melaka Paddy Production with forecasting until 2030
9
Based on Figure 4, there was a constant movement trend of paddy yield from 1988 to 2019. Even
with continuing government intervention, paddy production growth in Malaysia has been slow, rising
from 2.85 tons per hectare in 1980 to 4.2 tons/ha in 2017 [27]. The Agro-food segment's efficiency is
still considered to be very low, as production is typically carried out on a smaller scale and lack the use
of technology, as entrepreneurs or farmers in this sector continue to rely heavily on expensive imported
seeds, as the local supply of high-quality seeds remains insufficient [24]. Paddy production was
estimated based on multiple regression as follows:
̂ =1.113+1.017 (HA)-0.007(YEAR)+0.081(CIF)
𝑃𝑌 (5)
The forecasting was done based on a 95% confident interval mean for increasing rate. From the
model, this study estimated the paddy yield for 10 years based on means, lower boundaries and upper
boundaries. In addition, the researcher includes another two situations which are PY (24.6%) and PY
(PN) and make them five in total. PY (24.6%) is referring to the upper boundaries increasing rate of
paddy yield while PY (PN) is based on paddy nuclear production. Paddy nuclear or NMR152 was
introduced by Institute Nuclear Malaysia (IMR) in early 2021. This variety is believed can increase
paddy yield to 8 mt/ha per season. If the rice subsistence level is to be maintained at 70 percent to 80
percent, rice output should be increased to 7 tons/hectare on average [23]. For the past 32 years, Melaka
can produce a paddy yield between 2.1 mt/ha and 4.9 mt/ha. By looking at Figure 4.2, PY (24.6%) has
the top production and followed by PY (PN), PY (UPPER), PY (MEAN) and PY (LOW). Their
production in 2030 was 104,774mt, 40,777mt, 21,651mt, 11,321mt and 71,27mt respectively. The
researcher believes it might be quite impossible for the state government to increase their paddy
production by 24.6% every year until 2030 because it needs almost 34,925ha harvested area or 17,463ha
parcel area. The current paddy parcel area in Melaka is 1,837ha and the highest was recorded in 1988 at
10,418ha. Therefore, it is advisable that paddy nuclear is the best option out of five situations under
these studies. However, the state government needs to increase the paddy parcel area from 1,837ha to
2,549ha.
3.6 Melaka Rice Production Estimation until 2030

Figure 5 is an estimate based on a 65% paddy to rice conversion rate (PDCR). The 65% PDCR is
constant from 1988 until 2019. Total rice production was determined based on the equation as follows:
RPRODt= PDCRt * PYt (6)
Figure 5. Melaka Paddy Production with forecasting until 2030
10
Based on Figure 5, there was a constant movement trend of rice production from 1988 to 2019.
Similarly, Malaysia's rice output has been relatively stable in comparison to neighbouring ASEAN
countries like Indonesia, Thailand, Vietnam and the Philippines which has increased since 1990 [3].
Next, RPROD (24.6%) has the top production and followed by RPROD (PN), RPROD (UPPER),
RPROD (MEAN) and RPROD (LOW). Their production in 2030 were 68,103mt, 26,505mt, 14,073mt,
7,359mt and 4,632mt respectively. In short, RPROD (24.6%) and RPROD (PN) showed a promising
increasing trend while RPROD (UPPER) and RPROD (MEAN) increase gradually. However, RPROD
(LOW) is not a good approach because it showed the production is less than 2019 for 23.6%. For the
past 32 years, Melaka can produce rice between 1.4 mt/ha and 3.2 mt/ha. However, they may increase
rice production up to 5.2 mt/ha on average if they use paddy nuclear. The limitations of this study include
the data focus only on paddy land as the factor contributing to paddy yield in Melaka. Moreover, this
study assumes there is no land agricultural constraint in Melaka. However, there are other elements or
factors that may affect paddy production which include climate variability, management techniques, soil
features, water, fertilizer and technology.
4. Conclusion
In general, the trend of paddy production in Melaka shows a slight increase of 6.22% between 1988 and
2019. This was due to stagnant or almost constant of rice harvested area for the past 32 years with only
5.45%. Melaka paddy production exhibited a negative growth during the Asia crisis and global financial
crisis of 1998-1999, 2004-2005 and 2008-2009. During these times, the paddy farmers received lower
yield and growing production costs as a result of reliance on imported inputs and rising labour wage
rates. Moreover, the percentage of the parcel area utilizing as harvested area or also known as cropping
intensity factor (CIF) (%) between 1988 and 2016 was ranged from 4.0% to 52.0%. The CIF was highest
during 2017 at 95.5% because the parcel area left on that year was only 1,837ha whereas there was a
3,414ha parcel area in 2016. Melaka has experienced a big loss in term of paddy parcel area with (-
82.4%) between 1988 and 2019. The agricultural land shrinks, as a result of the conversion of food
farming areas to oil palm plantations and the development towards residential and industrial sectors.
The results indicated that in order for paddy and rice production to increase by 24.6 percent or with
upper bound per year until 2030, at least 14,652ha harvested area or 7,326ha parcel area needed to be
expanded. However, by increasing the harvested area from 3,360ha to 5,097ha or parcel area from
1,837ha to 2,549ha at the end of 2030, Melaka may increase their paddy yield and rice production until
11,321mt and 7,359mt respectively. These values are 21.4% more than the 2019 production. In addition,
the results demonstrated that paddy nuclear may increase the paddy yield and rice production until
40,777mt and 26,505mt respectively. These values are 337.4% more than the 2019 production. In
conclusion, by increasing the harvested area and the expansion of paddy nuclear, the Melaka government
may increase their production and self-sufficiency, and thus help the Malaysian government in achieving
75% SSL in Twelfth Malaysia Plan 2021-2025. Furthermore, precise and up-to-date paddy statistics are
especially crucial during occurrences like natural disasters since it allows officials to forecast yield loss
and end-of-season harvest
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13

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- THE PRODUCTIVITY IMPROVEMENT

This content was downloaded from IP address 39.41.181.98 on 25/08/2022 at 03:12

Econometric modelling for estimating of paddy yield and rice

Shahidan M S1, Fatah F A1, Lim H E2

Corresponding author’s email address: fazleen5201@uitm.edu.my

2. Material and Methods

2.1 Theoretical background of OLS regression

2.1.1 The Paddy Production

2.1.2 Rice Production Formula

2.2 Data collection

2.3 Statistical Analysis

3.1 Descriptive Statistic

Table 1. Descriptive Statistic for Paddy Yield equation

3.2 Multiple Regression Analysis

Figure 1. Normal P-P Plot for Paddy Yield (PY)

Figure 2. Plot of *ZRESID against *ZPRED for Paddy Yield (PY)

PY 1.000 0.935*** -0.087 0.704***

Table 3. Result of Multiple Regression for Paddy Yield (PY)

3.4 Melaka Paddy Production from 1988 to 2019

Figure 3. Melaka Paddy Production from 1988 to 2019

3.5 Melaka Paddy Yield Estimation until 2030

Figure 4. Melaka Paddy Production with forecasting until 2030

3.6 Melaka Rice Production Estimation until 2030

Figure 5. Melaka Paddy Production with forecasting until 2030

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Figure 2. Plot of ZRESID against ZPRED for Paddy Yield (PY)

PY 1.000 0.935* -0.087 0.704*