Environmental efficiency of smallholder rubber production

The economic benefits of Indonesia's rubber production are increasingly questioned because of their associated problematic effects on the environment, such as disturbances of the native ecosystem through alien and invasive organisms and overall negative effects on biodiversity. In order to reconcile economic benefits and threats to ecological functions, the exact nature of the interaction between rubber production and the surrounding ecosystems needs to be analyzed so that adequate policy interventions could be devised. In this paper, we focus on the trade-off relationship between rubber output and the ecosystem disturbance, proxied by the prevalence of invasive plants. Our approach is based on a directional output distance function, which allows the simultaneous estimation of efficiency and of the determinants of environmental efficiency. We apply this model to a household level socioeconomic data set and a plot-level environmental data set, from Jambi in 2012. Our results point towards a concave trade-off curve, indicating that an increase in rubber output is accompanied by an increase in ecosystem disturbance. Farm specific efficiency estimates indicate subdued level of efficiency, illustrating the possibility to reduce ecosystem disturbance while simultaneously increasing rubber output. The inefficiency levels are found affected by several management related variables, e.g., the glyphosate application. Acknowledgement :