Impact of infrastructure on profit efficiency of vegetable farming in West Java, Indonesia: stochastic frontier approach
2014
Rachmina, D. | Daryanto, A. | Tambunan, M. | Hakim, D.B.
Infrastructure plays an important role in increasing farm profit, since it reduces transaction costs which affect input and output price. The vegetable farming profit is relatively high although it varies, due to different infrastructure conditions. The study was conducted to analyze the level of profit efficiency due to various infrastructure conditions and to reveal the determinants of vegetable farming profit. The research was conducted in West Java, Indonesia with 192 sample farming activities. The results indicate that vegetable farming was not yet efficient, with an efficiency level of 0.53, and around 70 percent of farming activities having an efficiency level below 0.7. Factors that influenced significantly the profit were seed price, chemical fertilizers, wage, and non-land capital formation. The increase of crop diversification, land conservation technology, seed technology, number of credit, farmer's education, and market access to input market are very effective in increasing vegetable farming profit efficiency.
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