Does the climate change adaptation affect technical efficiency? Empirical evidence from potato farmers in East Java, Indonesia

Abstract

Under climate change, maintaining technical efficiency in farming is crucial for smallholder farmers to enhance their yield and productivity; therefore, it is essential to implement climate change adaptation strategies to sustain this technical efficiency. This study investigates the impact of diversifying climate change adaptation strategies on the technical efficiency of 217 potato farmers in East Java, Indonesia. Stochastic frontier analysis (SFA) was employed to measure farming technical efficiency, while a two-stage residual inclusion approach (2SRIA) was used to estimate the impact of climate change adaptation on this efficiency. This research identifies six common adaptation strategies: adjusting planting dates, cultivating drought-tolerant varieties, intercropping, altering input usage, conserving land, and improving irrigation systems. The empirical findings reveal a significant positive correlation between diversifying climate change adaptation strategies and enhanced technical efficiency among potato farmers. This suggests that employing more adaptation strategies will significantly improve farmers’ technical efficiency. Analyzing each adaptation strategy, the research highlights the positive impact of adjusting planting dates, adopting drought-tolerant varieties, implementing land conservation, and improving irrigation systems on technical efficiency. By contrast, intercropping and altering input usage adversely affect technical efficiency. This finding implies the need to promote climate change adaptation based on farmers’ specific characteristics.

Keywords

• Climate change adaptation
• potato farming
• technical efficiency
• two-stage residual inclusion approach
• adaptation strategies
• Economics and Development