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2ND-ICNRSD-2022 IOP Publishing
IOP Conf. Series: Earth and Environmental Science 1188 (2023) 012029 doi:10.1088/1755-1315/1188/1/012029
Income, Risks, Economic Efficiency of Rice Business and

Economic Sustainability for Rice Farmers in Sambas District
R Burhansyah1, K Supriadi2*, J C Kilmanun1 and D O Dewi1

1
Research Center for Behavioral and Circular Economics, Research Organization for
Governance Economy and Community Welfare, National Research and Innovation
Agency (BRIN), Jakarta, Indonesia
2
Research Center for Food Crops, Research Organization for Agriculture and Food,
National Research and Innovation Agency (BRIN), Jakarta, Indonesia
*
E-mail: khojinsupriadi@gmail.com, Orchid ID: 0000-0003-3661
Abstract. The purpose of this research to appraise the income of rice farming, to set the risk of
rice production, examine the degrees of efficiency of rice farming and economic sustainability
for rice farmers in Sambas Regency. The primary data used in the research was obtained using
a structured questionnaire administered to 60 selected farmers. R / C ratio, coefficient of
variation, and the stochastic frontier production function were used to analyze the data. The
results exhibited that rice farming in Sambas Regency was profitable with income reaching Rp.
7,696,442/ha. The degree of risk faced by farmers is moderate, which is 0.5. The average levels
of technical, allocative, and economic efficiency of rice farming in Sambas District were 0.811,
0.986, and 0.80. This result exhibits that paddy farmers can increase their technical efficiency
and allocative efficiency to achieve economically efficient conditions. Efforts to increase higher
economic efficiency can be carried out by increasing the use of management as well as improving
the level of input allocation used by paying attention to input prices to achieve a minimum cost
level.
1. Introduction
Rice commodity is the most important commodity in Indonesia because of its role as the main food
ingredient, which the majority of every Indonesian population consumes every day as a carbohydrate
intake. Not only that, but rice is also a dominant important commodity in the Indonesian economy
because it is closely related to monetary policy and involves socio-political issues [1].
Total rice production in Indonesia in 2019 was around 54.600.000 tons or a decrease of 4.600.000
tons (7.76 percent) compared to 2018. A relatively large increase in rice production in 2019 occurred in
the West Kalimantan Province, Yogyakarta, and South Kalimantan. Meanwhile, a relatively large
decline in rice production in 2019 occurred in the Provinces of South Sulawesi, Central Java, East Java,
West Java, and South Sumatra [2].
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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
West Kalimantan province's rice production in 2018 was around 1.625.355 tons with a harvest area
of around 608.645 hectares. Rice harvest area of Sambas regency until 2018 is around 290,048 hectares,
with a production of about 168.631,79 tons and productivity of 2.495 tons/ha [3].
The problems faced in rice farming include narrow land area, low mastery of technology, low capital,
climate change, attacks by plant-disturbing organisms, and fluctuations in selling prices. These problems
pose risks and uncertainties in rice farming [4].
The profile of rice farming is characterized by progressively narrower land management. According
to the 2018 CSA census, there is an increase in the number of smallholder farmers (agricultural
households who control land less than 0.5 hectares) from 27,222,773 households compared to the 2013
census of around 25,751,267 households [5]. This rice cultivation business is generally a family business
that has been carried out from generation to generation. Among the motivations for the establishment of
this business was rice as the staple food of the community, to continue existing businesses (family
businesses), to support natural resources, and to have experience with simple skills.
The maximum productivity of rice farming if rice farming must be carried out intensively so it
requires the skill and tenacity of each farmer. Assessing productivity problems examines the problem
of farm efficiency. This is because the productivity affects the level of technical efficiency of cultivation
carried out by farmers which shows how much maximum output can be produced from each available
input [6,7].
Research on the technical efficiency of rice plants has been carried out, example the degrees by
technical efficiency of organic rice farming in Bantul regency reaches 0.71% [8]. The degrees of
technical efficiency of rice farming in West Java reaches 74.22% [9]. The degrees of technical efficiency
of rice farming based on land area is as follows: wide land reaches 0.88, medium land reaches 0.92,
narrow land reaches 0.94, marginal land reaches 0.75 and all land area reaches 0.88 [10].
The purpose of this research to determine the level of income of rice farming, the level of risk faced
by rice farmers, the degrees of efficiency of rice farming and economic sustainability for rice farmers in
the Sambas Regency.
2. Research methods
The research was conducted in Sambas regency, the center of rice production in West Kalimantan
Province. Data were collected from rice farmers in paddy fields in 11 sub-districts with the highest
average productivity in Teluk Keramat district, and Jawai district. and Sambas district. Primary data
comes from rice farmers with 60 respondents as respondents.
The data that has been collected is analyzed quantitatively using the income formula to determine
the level of rice farm income per planting season.
𝐼 = 𝑇𝑅 − 𝑇𝐶
= (𝑄 × 𝑃𝑄) − 𝑇𝐶
Explanation:
I : Rice Farming Income (IDR)
TR : Total Revenue (IDR)
TC : Total Cost (IDR)
Q : Production (kg)
PQ : Selling price (IDR kg-1)
To find out whether rice farming is feasible or not.
𝑅 𝑇𝑅
𝑅𝑎𝑡𝑖𝑜 =
𝐶 𝑇𝐶
Explanation:
TR : Total Revenue (IDR)
TC : Total Cost (IDR)
2
There are 3 criteria for calculating, namely:

a. If R/C > 1, then profitable farming is feasible
b. If R/C = 1, then the farm is at the break-even point.
c. If R/C < 1, then the farming is not profitable or not feasible to operate.
The farm risk level is determined based on the coefficient of variation as follows:
𝑆𝐷
𝐶𝑉 =
𝐸
Explanation:
CV : Coefficient of Variation
SD : Standard Deviation
E : Average farm income
The greater the coefficient of variation (CV), the greater the risk that rice farmers must have. The
lower-income limit (I.) is also calculated to show the lowest possible income value for the farmer. If the
value is less than zero, the farmer will most likely experience a loss. The formula for lowering the
density is as follows:
𝐼 = 𝐹 − 2𝑉
Explanation:
I : Lower income limit
E : Average Farm Income
V : Standard deviation
The degrees of technical efficiency of rice farming was analyzed using the Cobb-Douglass stochastic
function. The mathematical model of this function can be written as follows:
𝑙𝑛𝑌 = 𝑎̂0 + 𝑎̂1 𝑙𝑛𝑋1 + 𝑎̂2 𝑙𝑛𝑋2 + 𝑎̂3 𝑙𝑛𝑋3 + ̂𝑎4 𝑙𝑛𝑋4 + 𝑎̂5 𝑙𝑛𝑋5 + 𝑎̂6 𝑙𝑛𝑋6 + (𝑣𝑖 − 𝑢𝑖) ……………..(1)
Explanation:
Y : Rice production (kg)
X1 : Land area (ha)
X2 : Seed (kg)
X3 : Pupuk Urea (kg)
X4 : NPK fertilizer (kg)
X5 : Pesticide (l)
X6 : Labor (Unit Labor cost)
To decide the value of the in-efficiency effect in this study, the following equation is used:
𝑈𝑖 = 𝑎̈ 0 + 𝑎̈ 1 𝑙𝑛𝑍1 + 𝑎̈ 2 𝑙𝑛𝑍2 + 𝑎̈ 3 𝑙𝑛𝑍3 …………………………………………………………........(2)
The factors that affect technical in-efficiency include:
𝑎 ̈_1= Age of farmer (years)
𝑎 ̈_2= Education (years)
𝑎 ̈_3= Experience in rice farming (years)
Estimating parameters from formulas 1 and 2 were carried out simultaneously with the Maximum
Likelihood Estimation (MLE) method with the FRONTIER 4.1 [11]. By using this program, the
technical efficiency of rice farming will be obtained.
𝑌 𝐸(𝑌𝑖 |𝑈𝑖 𝑋𝑖 )
𝑇𝐸𝑖 = = = 𝐸[exp(−𝑈𝑖 ) ∉𝑖 ]
𝑌 ∗ 𝐸(𝑌𝑖 |𝑈𝑖= 0, 𝑋𝑖 )
Explanation:
𝑇𝐸𝑖 : Farmer Technical Efficiency i
3
Y : Actual Production
Y* : Potential Production (obtained from the stochastic frontier production function)
The value of 𝑇𝐸𝑖 ranges between 0 and 1.
If TE value is getting closer to 1 (one), then rice farming can be said to be technically more efficient
and if it is close to 0 (zero) then rice farming can be said to be technically inefficient. A production
method can be said to be more efficient than this method to produce greater output at the same sacrifice
level. A production method is said to be efficient if the smallest sacrifice produces the same output.
Efficiency in farming is one indicator of the success of the production process [12].
Economic efficiency will be achieved if technical efficiency and allocative efficiency can be
achieved. The difference in the level of economic efficiency between one farm and another is caused by
differences in the level of technical efficiency or allocative efficiency or both. Economic efficiency is
the product of all technical efficiency and allocative efficiency of all production factors.
Economic Efficiency is defined as the ratio between the minimum observed total cost of production
and the actual total cost, as formulated in the following equation:
𝐶 ∗ 𝐸(𝐶𝑖 |𝑈𝑖 = 0, 𝑌𝑖 𝑃𝑖 )
𝐸𝐸 = = = [exp(−𝑈𝑖 ) ∉𝑖 ]
𝐶 𝐸(𝐶𝑖 |𝑈𝑖 𝑌𝑖 𝑋𝑖 )
Explanation:
EE: Economic Efficiency
C*: Minimum Total Production costs
C: Total Actual Production Costs
Economic efficiency analysis was carried out using the Cobb-Douglas stochastic frontier cost
function model as follows:
𝑙𝑛𝐶 = 𝑎̂0 + 𝑎̂1 𝑙𝑛𝑌 + 𝑎̂2 𝑙𝑛𝑃2 + 𝑎̂3 𝑙𝑛𝑃3 + 𝑎̂4 𝑙𝑛𝑃4 + 𝑎̂5 𝑙𝑛𝑃5 + 𝑎̂6 𝑙𝑛𝑃6 + (𝑣𝑖 − 𝑢𝑖) … . . … … . . … ..(3)
Explanation:
C: Total production costs (IDR)
Y: Rice production (kg)
P2: Price of Seeds (IDR kg-1)
P3: Urea Fertilizer Prices (IDR kg-1)
P4: NPK Fertilizer Prices (IDR kg-1)
P5: Pesticide Prices (IDR/litre)
P6: Labor wages (IDR/hrs)
𝑎 ̃_0: Intercept
𝑎 ̂_1: Regression Coefficient
𝑣𝑖: Errors made due to random picking
𝑢𝑖: The effects of inefficiency appear
To determine the value of the in-efficiency effect in this study, the following equation is used:
𝑈𝑖 = 𝑎̈ + 𝑎̈ 1 𝑙𝑛𝑍1 + 𝑎̈ 2 𝑙𝑛𝑍2 + 𝑎̈ 3 𝑙𝑛𝑍3 ……………………………………………………………(4)

The factors that affect in-efficiency include:
Z1: Farmer Age (years)
Z2: Education (years)
Z3: Experience running rice farming (years)
Estimation of parameters from equations (3) and (4) using the Maximum Likelihood Estimation (MLE)
method was carried out simultaneously using FRONTIER 4.1 [11]. The computation program
4
calculation measures cost efficiency (CE) [13]. The degrees of economic efficiency (Economic
Efficiency / EE) of rice farming is obtained using the formula:
1
𝐸𝐸 = …………………………………………………..……………………....(5)
𝐶𝑜𝑠𝑡 𝐸𝑓𝑓𝑖𝑐𝑖𝑒𝑛𝑐𝑦 (𝐶𝐸)
Economic efficiency (EE) is the product of technical efficiency (TE) and allocative efficiency (EA).
Therefore the value of allocative efficiency (EA) can be obtained by the equation:
𝐸𝐸
𝐸𝐴 = …………………………………………………….……………………………………(6)
𝐸𝑇
with AE values ranges from 0 to 1.
3. Results and discussion

3.1. Use of production means
The use of new improved varieties (VUB) of seeds will be able to increase production compared to non-
superior seeds. The use of superior seeds for rice farming in addition to increasing the number of
production results is also directed at increasing the quality/quality of the resulting production.
8 local rice varieties are predominantly planted in Sambas Regency, among others; Banjar, kuning,
ringkak, kapuas, humariah, ketumbar, sirendah, siam [14]. For new superior varieties, among others;
cilosari from BATAN, inpari 1 and inpari 32 from the Agricultural Research and Development Agency.
The cilosari variety is preferred because it blasts disease resistance and the yield is quite high. The
average seed usage was around 29.88 kg/ha (Table 1).
Table 1. The average usage of rice farming seeds, fertilizers, and pesticides in sambas district.
Production Facilities n Average unit
Seed 60 29,88 Kg
urea fertilizer 60 105,98 Kg
NPK fertilizer 60 174,84 Kg
Pesticide 60 0,92 Litre
Fertilizer production factors are materials that contain one or more nutrients added to plants, either
directly or indirectly. The types of fertilizers used for the general use of rice farming is shown in Table
1.
The use of fertilizers is a farmer's effort to increase land productivity by adding nutrients needed by
plants. Fertilization is very important to increase crop production by increasing the availability of
nutrients in the soil. It is hoped that by fertilizing the plants' needs for nutrients can be full filled
optimally. Table 1 shows that farmers in Sambas Regency have not been intensive fertilization
treatment. Rice fertilization recommendations for Sambas Regency, among others; are Urea fertilizer
150 kg/ha, and NPK fertilizer 200 kg/ha. [15]. The use of organic fertilizers for rice plants is rarely used
by farmers.
Labor in the production factor of rice farming is an important factor. In managing rice farming,
farmers contribute their labor and ability. The average use of labor for rice farming is shown in Table 2.
Table 2. The average outflow of rice farmers in sambas regency.
Labor outpouring Hours h-1) Man Woman
Preparation of seed and land 7.19 10,79
Planting and maintenance 12.58 18.88
Harvest 16.18 24.27
Total 35.95 53.93
5
In general, the labor force in rice farming can be divided into three types of work, namely: i)
preparation of seeds and land, ii) planting and maintenance, and iii) harvesting. The first type of work
involves soaking seeds, constructing nurseries, spraying weeds with pre-planting herbicides, and
cultivating the land.
The second type of work includes planting, replanting, fertilizing, spraying pesticides, and weeding.
Meanwhile, the third type of work includes: harvesting and transporting crops. Table 2 exhibits that the
use of farmers' labor in the Sambas District is not yet intensive. This is especially evident for the third
type of work, namely harvesting.
Rice production and productivity are strongly influenced by available capital and cultivation
techniques employed by farmers. Available capital and cultivation techniques influence the level of rice
production and productivity. Production and farm productivity can then be used to determine whether a
farm has been well managed or not. The average rice production in Sambas Regency is 2.49 tons/ha
(Table 3).
In table 3 it can be seen that the general rice production in Sambas Regency is 168,632 kg with a
productivity of 2.49 tons/ha [16]. This value is lower than the national average productivity in 2019,
namely 5.11 tonnes/ha. Low productivity is caused by the use of new superior variety that is not optimal,
and the use of fertilizer doses is still below the recommendation.
Table 3. Average of land control, production, and rice productivity.
Description Average
Land area (hectares) 0,87
Production (kg) 168.63
Productivity (kg ha-1) 2.49
Productivity (ton ha-1) 2,49
Source: CSA Sambas Regency, 2019
3.2. The production value and cost structure of rice farming

The production value obtained by farmers is an indicator in the agricultural economic assessment. The
production value or farm income is the multiplication of the amount of production and the price received
by the farmer. The value of rice farming production in the Sambas Regency is shown in Table 4.
Table 4. The production value and cost structure of rice farming in sambas regency.
Explanation Total Percentage
Revenue
Production (kg ha-1) 2.954
Price (IDR) 4.700
Production Value (IDR ha-1) 13.883.800
Variable Cost
Seed (IDR ha-1) 303.487 4,90%
Fertilizer (IDR ha-1) 736.482 11,90%
Pesticide (IDR ha-1) 240.690 3,89%
Labor (IDR ha-1) 4.059.425 65,61%
Fixed Cost (IDR) 824.774 13,33%
deficiaci cost (IDR) 22.500 0,36%
Total Cost (IDR) 6.187.358
In table 4 it can be seen that rice farming acceptance in Sambas regency reaches IDR. 13,883,800 /
ha. The amount of revenue is influenced by the amount of production and the price received by rice
farmers. The total cost of rice farming is IDR 6,187,358 / ha. Labor costs are the highest cost item
because they cover 65.61% of the total costs incurred by farmers in Sambas Regency. This shows that
rice farming is fairly intensive farming in the use of labor. Meanwhile, the cost of seeds, fertilizers, and
6
pesticides ranges from 3.89% to 11.90% of the total cost of rice farming. Fixed costs consist of land rent
and capital interest.
3.3. Rice farming income
Revenue is the production multiplied by the selling price of rice, while the profit is the revenue minus
the total cost consisting of variable costs and fixed costs. This farming profit will then be used by farmers
to make ends meet. Table 5 shows that the profit received by rice farmers in Sambas Regency is Rp.
7,696,442, R/C = 2.24. These results indicate that rice farming in Sambas Regency is economically
profitable and feasible to cultivate.
Table 5. Rice farming income in sambas regency.
Description Number (rupiah/ha)
Revenue 13.883.800
Variable Costs 5.340.084
Fixed cost 847.274
Total cost 6.187.358
Advantage 7.696.442
R/C 2,24
3.4. Rice farming risks

Analysis of the coefficient of variation of rice farming income is used to decide the risk of rice farming
income. The smaller the coefficient of variation, the smaller the risk faced by farmers. Conversely, the
greater the coefficient of variation, the greater the risk faced by farmers.
Rice farming in Sambas District faces an income risk of 0.50 or 50%. This means that for every
rupiah and income received by farmers, the risk faced is 0.50 rupiah. The lower limit of income
generated by rice farming is IDR 66,031. The value of L <0 indicates that rice farming in Sambas
Regency provides the possibility of experiencing losses in each production process. This figure shows
that rice farmers must have the courage to accept losses of IDR 66,031 in each production process.
Table 6. Risks of rice farming in sambas district.
Description Income
Average (IDR ha-1) 7.430.307
Standard Deviation 3.748.169
Coefficient of Variation 0,50
The lower limit of income I -66.031
3.5. Rice farming technical, allocative, and economic efficiency

The estimation results show the sigma-squared value of 0.1641 and it is insignificant, so it can be
interpreted that the diversity of rice production in Sambas Regency which is contributed by in-efficiency
effects and external effects has no significant variations. Then the gamma value obtained is 0.9451 and
significant at 1%. This shows that 94.51% of the variation in rice production in Sambas Regency is
caused by differences in technical efficiency and the remaining 5.49% is caused by external influences
such as climate, pest and disease attacks, and errors in modeling. This shows that the effect of technical
inefficiency is a factor that significantly influences the variability of rice production.
All production factors variables are included in the model with a positive sign, except for pesticides.
The positive coefficient of the production factor of land area, seeds, urea fertilizer, NPK fertilizer, and
labor indicates that the addition of each production factor will increase rice production.
Meanwhile, the coefficient which has a negative sign of the pesticide production factor indicates that
increasing the amount of pesticide does not increase rice production but on the contrary, can reduce the
total output. This is due to the excessive use of pesticides by farmers. Excessive use of pesticides will
cause plants to grow not optimally.
7
Table 7. Approximation of the frontier production the function of rice farming in sambas regency.
Variable Parameter Coefficient T-ratio
Constant 4.515811 16.317134
Land area Ha 0.138133 ns 0.138133
Seed Kg 0.336961 *** 4.292838
Urea fertilizer Kg 6.437571 ** 1.738257
NPK fertilizer Kg 0.326246 *** 5.658879
Pesticide Litre -0.469598 ns -0.379634
Labors for farming activities Hour 0.089717 * 1.510828
Constant 6.320009
Age of farmer Year -2.741187 ns -0.485268
Farmer education Year -1.088137 ns -0.366149
Farmer experience Year 1.355102 ns 0.507179
Sigma-squared 0.164103 ns 0.851840
Gamma 0.945188 *** 14.333454
Explanation: *** : significant at a = 0,01
** : significant at a = 0,05
* : significant at a = 0,10
Ns : non-significant
Partial testing of the production function, as shown in Table 7 shows that the seed, urea and NPK
fertilizer, and labor have a significant effect on rice production. Meanwhile, the production factor of
land area and pesticides did not significantly affect rice production.
The characteristic of the frontier production model for estimating technical efficiency is the
separation of the impact of exogenous variable shocks on output through the contribution of variance
that describes technical efficiency [17]. In other words, the use of this method is possible to predict the
inefficiency of a production process without ignoring the error of the model. Estimating efficiency using
the frontier production function makes it possible to know the degrees of efficiency achieved by each
farming unit [11], as displayed in Table 8.
Table 8. Distribution of Rice Farming Technical Efficiency (TE) in Sambas Regency.
Technical Number of
Percentage
Efficiency Level Farmers
<0,5
0,51-0,60 5 8,3%
0,61-0,70 8 13,3%
0,71-0,80 8 13,3%
0,81-0,90 24 40,0%
0,91-1,00 15 25,0%
Total 60
Average 0,811
Minimum Value 0,511
Maximum Value 0,961
The analysis showed that the degrees of technical efficiency attained by rice farmers in Sambas
District ranged from 0.511 to 0.961 with an average of 0.811. Of the 60 farmers, 39 farmers (65%) have
achieved an efficiency level of above 0.800 or 80%. This indicates that there are still 35% of rice farmers
are still at a technical efficiency level below 80% or are still experiencing technical inefficiency in their
farming. There are differences in the degrees of technical efficiency that can be achieved by each farmer.
8
This shows that there is still a chance for rice farmers to improve technical efficiency through improved
farm management. The difference in the degrees of technical efficiency achieved by rice farmers
indicates different levels of cultivation and application of technology.
The difference in the level of technical mastery is caused by the attributes inherent in the farmer such
as age, education, and farming experience, and can also be caused by external factors such as counseling.
The difference in technology application means the difference in the allocation of production inputs.
Different degrees of technical efficiency are also caused by the ability of farmers to obtain production
inputs. The number of productive-age family members also plays a role in the use of labor input [18].
The difference in the degrees of technical efficiency achieved by rice farmers indicates different
levels of cultivation and application of technology. The difference in the level of technical mastery is
caused by the attributes inherent in the farmer such as age, education, and farming experience, and can
also be caused by external factors such as counseling. The difference in technology application means
the difference in the allocation of production inputs. Different degrees of technical efficiency are also
caused by the ability of farmers to obtain production inputs. The number of productive-age family
members also plays a role in the use of labor input [18].
Factors that are thought to affect the technical inefficiency of rice farming in Sambas regency are
age, education, and experience of farmers. The approximation results in the table show that there is no
effect on the in-efficiency of rice farming, the degrees of education and experience of farmers have a
negative coefficient which means that the higher the degrees of education and experience of the farmers,
the smaller the farmer is doing inefficiency in running rice farming. Or in other words, the higher the
degrees of education and experience of the farmers, the more efficient the farmer is in running their
farms.
Table 9. Approximation of factors affecting the technical In-efficiency of rice farming in Sambas
district.
Age of farmer year 0.314979 ns 0.66007
Farmer education year -9.070400 ns -0.64418
Farmer experience year -0.319436 ns -1.08252
Furthermore, the economic efficiency of rice farming is estimated using the stochastic frontier cost
function with the Maximum Likelihood Estimation method. Then the allocative efficiency value is
predicted by dividing the economic efficiency value by the technical efficiency as shown in equation 6.
The estimation results of the frontier stochastic cost function are shown in the following table 10.
9
Table 10. Estimation of rice farming stochastic frontitarian cost functions.

Constant -29,173421 -29,250856
Rice production kg -0,001983 ns -3,055160
Price of Seeds kg -0,002079 ns -3,551609
Urea fertilizer prices kg 1,225714 *** 8,596112
NPK fertilizer prices kg -3,514568 ns -4,813503
Pesticides prices ltr 17,832814 *** 21,652318
Labor wages hrs -9,935638 ns -12.081473
Constant -0,000638 -0,000639
Age of Farmer year -0,007496 ns -1,067772
Farmer education year -0,006911 ns -0,009162
Farmer experience year -0,418325 ns -0,423731
Sigma squared 17,259623 17,299223
Gamma 0,999999 80,272304
Mean Efficiency 0,1208463
Explanation: *** : significant at a = 0,01
** : significant at a = 0,05
* : significant at a = 0,10
ns : non- significant
The estimation results explain that two variables have a significant effect on rice production costs,
namely the cost of urea fertilizer and the price of pesticides. The price of urea fertilizer and the price of
pesticides have a good effect on rice farming. The estimation results also show that age, education, and
farmer's experience have no significant effect on the inefficiency of rice farming.
The distribution of the degrees of allocative and economic efficiency of rice farming in the Sambas
Regency is presented in the following table. The degrees of allocative efficiency achieved by rice
farmers in Sambas Regency range from 0.1 to 1, with the highest percentage in the efficiency level group
below 50% at 46.7%. Farmers with an allocative efficiency level between 0.91-1.0 and 0.61-0.70 were
26.6%. The efficiency level is 0.71-0.80 as much as 8.3% and the efficiency level is 0.51-0.60 as much
as 6.7%. This shows that there are still relatively many rice farmers in Sambas Regency to improve their
level of efficiency.
The combined effect of technical efficiency and allocative efficiency of rice farmers in the Sambas
District explains that the level of economic efficiency that rice farmers in Sambas Regency can range
from 0.1 to 0.95 with the highest percentage at an efficiency level of below 50%.
While the efficiency level of farmers from 0.81 to 0.90 of 28.3% occupies the second largest. The
general degree of economic efficiency is 0.80 as shown in the Table. This shows that if the general
farmer in the sample can achieve maximum economic efficiency, the farmer can realize it with a cost
savings of 20% (I-0.8/1). In addition, if the most in-efficient rice farmer achieves maximum economic
efficiency, the farmer can solve it with a cost savings of 99% (1- (0.01)/I)).
The results of the analysis explain that the level of economic efficiency of rice farming in Sambas
Regency can still be improved. One thing that needs attention is the occurrence of technical inefficiency
as a more serious problem compared to allocative inefficiency in the effort to achieve a higher degree
of economic efficiency. This condition is because the allocative approach is 0.9. Efforts to achieve a
higher degree of economic efficiency must be made by farmers by improving farm management and at
the same time improving the adoption rate of input allocations that are used by paying attention to input
prices, namely by adding fewer inputs or reducing excessive inputs so that a minimum level of costs is
achieved.
10
Table 11. Distribution of rice farming allocative efficiency (ea) and economic efficiency (ee) in
sambas regency.
Allocative Efficiency Economic Efficiency
Number Number
Efficiency Level
of Percentage of Percentage
Farmers Farmers
< 0,5 28 46,7% 18 30,0%
0,51-0,60 4 6,7% 6 10,0%
0,61-0,70 8 13,3% 8 13,3%
0,71-0,80 5 8,3% 11 18,3%
0,81-0,90 7 11,7% 17 28,3%
0,91-1,00 8 13,3% 0
Total 60 60
Average 0,12 0,80
Minimum value 0,10 0,01
Maximum value 0,99 0,95
Table 12. Index of technical allocative, and economic efficiency of rice farming.
Description Indeks Efficiency
Technical Efficiency (ET) 0,811
Allocative Efficiency (EA) 0,986
Economic Efficiency (EE) 0,801
4. Conclusion
Rice farming activities in Sambas Regency are protable farming with an income of 7,696,442 IDR ha-
1. The level of risk faced by farmers is moderate, which is 0.5 or 50%. in other words for every one
rupiah of income received by farmers, the risk faced is 0.5 rupiah. Rice farmers have to bear a loss of
IDR 66,031 for each production process. The average levels of technical, allocative, and economic
efficiency of rice farming in Sambas District were 0.811, 0.986, and 0.80, respectively. This shows that
the efficiency degrees of paddy farming in Sambas Regency can still be improved.
Increasing production and farmer's income in Sambas Regency can be done by increasing the number
of seeds, the amount of urea, and NPK fertilizer. Efforts to achieve a higher degree of economic
efficiency can be carried out by improving farm management and at the same time improving the level
of input allocation which is used by paying attention to farm input prices to achieve a minimum cost
level
Acknowledgments
The author thanks the Agency for Agricultural Research and Development, Ministry of Agriculture,
which has provided funds for the implementation of this activity. The author also thanks the farmer
groups in Sambas district, West Kalimantan province (Teluk Keramat sub-district, Jawai sub-district,
and Sambas sub-district) who have provided land and assisted in carrying out activities in the field.
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