COST EFFICIENCY OF INTEGRATED FARMING SYSTEM BASED ON RICE-CATTLE IN BENGKULU PROVINCE OF INDONESIA

Abstract

Integrated farming system of rice and cattle utilizes cattle and rice waste to be processed into organic fertilizer and feed which will be reused in farming. One of the excellences of integrated farming based on rice and cattle is production cost efficiency. This study aims at analyzing the costs efficiency as well as the variables that affect cost efficiency and inefficiency integrated farming systems in Bengkulu Province, Indonesia. The data taken was primary data on 129 rice and cattle farmers. The data were analyzed by using Stochastic Frontier Cost function. The parameters of the function were estimated by the maximum likelihood method using the computer program Frontier version 4.1. The results of the study showed that the variables of land area, seed prices, wage rates and tiller prices had a significant effect, while the variable price of Nitrogen fertilizer and P fertilizer price does not have a significant effect on the production costs of integrated farming on rice and cattle. Meanwhile, the variable of farmer’s age has a significant effect on inefficiency, while the variables of education, rice farming experience and experience of cattle farming have no significant effect on inefficiency.

Keywords

• cost efficiency
• integrated farming
• rice
• cattle