Technical Efficiency of Land Tenure Contracts in West Java Province, Indonesia

Obtaining land tenure contracts for rice farms is a major problem faced by farmer tenants in the province of West Java. This study aimed to analyze the type of land tenure contracts in this region and the levels of technical efficiency of each contract system. Data were collected through a survey, with respondents randomly selected from the Karawang and Subang districts of West Java. The stochastic frontier was used to determine the efficiency of each system. Results showed that the average area being tilled was higher than land owned due to land tenure arrangements that increased farmers’ access to land. Three common land tenure contracts in this region are fixed rental, sharecropping, and mortgage. Sharecropping and mortgage coefficients were found to be less efficient, while fixed rental was more efficient compared to owner-cultivated plots. These results provided evidence to support the view that sharecropping is inefficient for the tenants. However, sharecropping is still a common type of land transaction in West Java. To improve efficiency, the local government can help farmers by enabling them to lease land through fixed rental or other more favorable arrangements.