Efficiency Measurement of Oil Palm Plantation in Thailand: A Case Study of Oil Palm Agriculturists in Suratthani and Krabi Provinces

Abstract

The objectives of this study include (1) assessing the efficiency of Oil Palm Agriculturists in Krabi and Suratthani provinces and (2) Identifying factors and estimating impact of these variables on the efficiency score. The researcher applied SBM DEA model under input – oriented approach to evaluate technical efficiency scores, values of input slacks and output slacks together with the decomposition of these scores. Besides, the Tobit regression model was applied to assess the influence of independent variables on the technical efficiency score computed by the aforementioned SBM DEA model.The result showed that the average technical efficiency score for all Oil Palm Agriculturists in the sample was approximately 0.52267. In addition, only 50 Oil Palm Agriculturists operated on the efficiency frontier line. Out of this number, 28 were agriculturists in Krabi province and the rest of 22 were agriculturists in Suratthani province. The computation of output and input slacks and their decomposition suggested that Agriculturists with inefficient operation should reduce the farm size, expenses on fertilizer, and expenses on harvesting process, respectively. For the impact analysis by using the Tobit regression model, the factors significantly affecting technical efficiency score included total revenue from selling Oil Palm, dummy variable representing agriculturist with RSPO standard, total expenses on oil palm production, and amount of output per Rai.