Technical Efficiency of Rice Yield: Insights from IADA North-West Selangor, Malaysia

Abstract

Despite Malaysia’s concerted efforts to increase rice production, the self- sufficiency ratio significantly declined from 70.0% in 2018 to 62.6% in 2022. The country’s rice production primarily relies on ten granary areas in Peninsular Malaysia, with the Integrated Agricultural Development Area (IADA) North-West Selangor known for its high productivity. In the 2015 - 2016 main season, the region achieved a rice production rate of 6.0 tons per hectare, higher than the national average of 4.6 tons per hectare and 5.0 tons per hectare for other granary areas. However, by the 2020 - 2021 main season, productivity in IADA North-West Selangor had fallen to 4.8 tons per hectare, mirroring a worrying trend observed across other granary areas. Concurrently, the average national yield fell to 3.8 tons per hectare, while the average in granary areas dropped to 4.4 tons per hectare, indicating an overall downward trend. This study aims to identify factors influencing rice productivity in IADA North-West Selangor, a region struggling to maintain its historically high productivity levels. We conducted interviews with 74 Malay and Chinese farmers using a structured questionnaire to assess technical efficiency, which is a key determinant of yield. Stochastic frontier analysis (SFA) revealed significant variations in technical efficiency among farmers, suggesting potential for improvement across the region. Although farmers in IADA North-West Selangor currently exhibit lower yields and technical efficiency compared to their historically high values, there are promising signs of improved productivity with the right interventions which are applicable in other rice granaries.