The level of economic efficiency and competitiveness of maize at dairi district, North Sumatra Province

Abstract

Dairi District has potential maize farming that will increase maize production. The problem in maize farming is its low productivity because of its low efficiency of input use so that the competitiveness of maize farming is low. The objectives of this research are: (1) analyzing factors influencing maize production, analyzing economic efficiency of maize farm at Dairi District (2) analyzing maize farm competitiveness, (3) analyzing impact of input and output policy in maize farming competitiveness in Dairy District and (4) analyzing economic efficiency of maize farm effect to its competitiveness in Dairy District. The research methods are the Cobb Douglas stochastic frontier production function to analyze technical efficiency, the dual cost function to analyze allocative efficiency and the Policy Analysis Matrix (PAM) to analyze maize farm competitiveness. This research used cross section data. The research findings showed that factors like seed and fertilizers (SP-36 and Phonska) were positive and statistically significant on maize production (level of significance at 5 %), urea and herbicide were also positive and significant on maize production (level of significance at 10 %). Meanwhile, labor positive but not significantly affected maize production. The efficiency analysis revealed that the maize farmers had economic inefficiency. The frequency of extension visits was substansial in technical inefficiency and it significantly increased technical efficiency. Maize production in Dairi District as a result from the PAM showed potentially had competitive as well as comparative advantages. PAM analysis also showed that input policies protected maize farmers, but output policy did not protect (help) maize farmers. The effect of efficiency to competitiveness analysis showed that the increase in allocative efficiency will increase the competitiveness of maize.