Productivity and Technical Inefficiency of Alternative Pest Management Compliant and Non-Compliant Farmers: The Case of Shallot Growers in Java

In response to (a) growing demand for high safety and quality fresh food products; (b) increasingly stringent standards on chemical residues, and (c) concern regarding the sustainability of chemical input intensive agriculture, the adoption of sustainable production systems (IPM, Pesticide-Free, organic) in agriculture is rapidly expanding. This study uses data from 2011 Shallots Growers Survey in Indonesia to compare the productivity, technical efficiency of APM-adopter and conventional (non-adopter) shallots farmers. We also measure yield loss that may associate with technology adoption. Self-selectivity may cause the frontier production function to differ between the adopters and non-adopters. Propensity Score Matching (PSM) method is used to address self-selectivity before we continue the analysis with Stochastic Production Frontier (SPF). We reject the homogenous technology hypothesis and interestingly the result indicates that on average yield loss that associated with adopting APM farming practices only 1.5%. The yield loss itself can be gradually improved by implementing a proper training and extension methods and empowering the role of farmers’ group among shallot farmers.