Analysis of the Influence of Productivity and Efficiency of the Plantation Sector on the Island of Sumatra with DEA and MPI Approaches

Abstract

This research analyzes the levels of efficiency and productivity within the plantation sector across 8 provinces in Sumatra during the period of 2016-2021. This analysis employs the Data Envelopment Analysis (DEA) and Malmquist Productivity Index (MPI) methodologies. The utilized input variables encompass land area, quantity of fertilizer, and the agricultural workforce within the plantation sector. As for the output variables, they encompass the quantities of palm oil production, coconut production, coffee production, and rubber production. The research findings reveal fluctuations in the efficiency and productivity levels of the Sumatra plantation sector year by year. The efficiency levels exhibit an upward trend, while the productivity levels on average display a decrease, primarily attributable to a decline in technological change (TECHCH). Furthermore, an analysis conducted during the Covid-19 pandemic period indicates that the pandemic has notably impacted the efficiency levels within the plantation sector. However, in terms of productivity levels, Covid-19's influence appears to be insubstantial. Delving deeper, the findings from the potential improvement analysis reveal that the foremost sources of inefficiency stem from the output variables, particularly the coffee production quantity, followed by the palm oil production quantity. In light of these research outcomes, recommendations are extended to pertinent stakeholders. It is advised to concentrate efforts on the development of the plantation sector, encompassing policy initiatives, stimuli, and the incorporation of technology within plantation activities.