PRODUCTION FRONTIER AND TECHNICAL EFFICIENCY : THE CASE FOR BEEKEEPING FARMS IN MALAYSIA

Abstract

The objective of the present study is to determine the status of technical efficiency for a sample of beekeepers in Malaysia. This is because determining the efficiency status of farmers are very important for policy purposes. Efficiency also is a very important factor of productivity growth. In an economy where resources are scarce and opportunities for new technologies are lacking, inefficiency studies will be able to show that it is possible to raise productivity by improving efficiency without the resource base or developing new technology. Estimates on the extent of inefficiency can help decide whether to improve efficiency or to develop new technologies to raise agricultural productivity. In this study, a Cobb-Douglas production function was employed to beekeeping data. Using the method of Maximum Likelihood Estimation (MLE) procedure, we derived the stochastic frontier production function. The technical efficiency index computed shows a mean efficiency ratio of 0.625 implying that substantial inefficiency exists among the Malaysian beekeepers in the sample under study. Our results indicate that there are great potentials for the beekeepers to further increase output using the available inputs and technology.