Academy of Strategic Management Journal (Print ISSN: 1544-1458; Online ISSN: 1939-6104)


Performance of Soybean Farming in Java - Indonesia: Determinants and Improvement Strategies

Author(s): Agus Setiadi, Siswanto Imam Santoso, Bambang Mulyatno Setiawan

The objective of this study is to analyse the performance and technical efficiency of soybean production in Indonesia. This study was conducted in Grobogan Regency, a district in Central Java, the Indonesian soybean production centre. Four hundred soybean farmers were selected for interview. The data observed are in the form of farm characteristic, capital, and production cost. Stochastic frontier production is used to analyse the technical efficiency of using production factors on soybean production income. This is considered the main culprit of the very low productivity of soybean. Further, the inefficiency model shows that no significant factor affecting efficiency. This is understandable since the production system is in the irrational stage. The main factor that is possible to influence such a condition is the level of education. On average, the level of farmers' education is just elementary school and junior high school. This condition leads to failure in adopting technology in the soybean farming system as farmers might misunderstand the advanced technology. The stochastic efficiency results indicate that this variable does not affect efficiency. Technical efficiency in soybean cultivation in Indonesia is very low. A comprehensive improvement strategy must be carried out for improvement to increase production to reduce dependence on imports.

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