Input Side Efficiency of Production Factors

6.3 Relative Efficiency of Rice Milling Industry

Average score of constant return to scale technical efficiency CRSTE, variable return to scale technical efficiency VRSTE, and scale efficiency SE of all respondents were the same. All rice millers had ES equal to one. It was depicted in Table 13. While, the efficiency scores of each rice miller were illustrated in Appendix 3. Table 13 Summary of Average CRSTE, VRSTE, and SE Scores of All Respondents CRSTE VRSTE SE Mean 1.000 1.000 1.000 Maximum 1.000 1.000 1.000 Minimum 0.000 0.000 0.000 Efficiency Score equal to one 94 94 94 Efficiency Score less than one The rice milling businesses with efficiency score of 1.000 were best performing rice milling. The frequency distribution of technical efficiency CRSTE, pure technical efficiency VRSTE, and scale efficiency SE scores were shown in Figure 19. Figure 18 Distribution of CRSTE, VRSTE, and SE Scores of All Respondents In pure technical VRS side, referring to Appendix 3, all rice millers were operating at MPSS. Manually, this condition can be determined by comparing 94 94 94 0.900 0.900-0.950 0.950-1.000 1.000 F re q u en cy un it Efficiency Score CRSTE VRSTE SE both CRSTE and VRSTE scores. Due to both scores of all rice millers were similar equal to one, all rice millers were in the same condition. Summary of return to scale of all respondent was illustrated on Table 14. Table 14 Summary of Return to Scale of All Respondents NIRS Efficiency Condition Efficiency Type Number of Rice Miller IRS Efficient Technically Pure Technically Scale Inefficient Technically Pure Technically Scale MPSS Efficient Technically 94 Pure Technically 94 Scale 94 Inefficient Technically Pure Technically Scale DRS Efficient Technically Pure Technically Scale Inefficient Technically Pure Technically Scale Table 14 showed that a hundred percent of all respondents were at MPSS condition. Even, all of rice millers were efficient both technically, pure technically, and scale. In order to see distribution of the rice millers of each sub- district, the table below was summary of total rice miller separated by sub-district, efficiency score, return to scale condition of all respondents that illustrated in Table 15. Table 15 Summary of Total Rice Miller Separated by Sub-Districts, Efficiency Score, and Return to Scale Condition Sub-Districts Efficiency Score ES Total Rice Miller Total IRS MPSS DRS Gekbrong ES = 1 44 44 ES 1 Total 44 44 Warungkondang ES = 1 50 50 ES 1 Total 50 50 Table 15 showed sub-district of the rice miller in the first column. All rice millers both in Gekbrong and Warungkondang had ES equal to one. All rice millers in both sub-districts were at MPSS condition. Similar to Table 15, Table 16 also showed all rice millers have ES equal to one and at MPSS condition on the distribution of rice miller by type. As explanation previously, there were three types of rice miller that were separated by activity. Summary of total rice miller separated by type, efficiency score, and return to scale condition can be seen on Table 16. Table 16 Summary of Total Rice Miller Separated by Type, Efficiency Score, and Return to Scale Condition Type Efficiency Score ES Total Rice Miller Total IRS MPSS DRS Rent ES = 1 53 53 ES 1 Total 53 53 Non-makloon ES = 1 14 14 ES 1 Total 14 14 Combination ES = 1 27 27 ES 1 Total 27 27 All rice millers had ES equal to one and at MPSS condition. Present scale of all rice millers operation leads to 100 percent scale efficiency. MPSS condition means that rice millers maximize the average productivity for its given input- output mix and then DRS set in. Based on ES and value of slack, distribution of percentage both efficient and inefficient rice millers in Gekbrong and Warungkondang was illustrated in Table 17. Table 17 Percentage of Efficient and Inefficient Rice Miller in Gekbrong and Warungkondang Type Efficiency Frequency Percentage 1 2 Total 1 2 Total Makloon Efficient 17 15 32 38.64 30.00 34.04 Inefficient 12 9 21 27.27 18.00 22.34 Non- makloon Efficient 2 7 9 4.55 14.00 9.57 Inefficient 2 3 5 4.55 6.00 5.32 Combine Efficient 7 9 16 15.91 18.00 17.02 Inefficient 4 7 11 9.09 14.00 11.70 Efficient 26 31 57 59.09 62.00 60.64 Inefficient 18 19 37 40.91 38.00 39.36 Total 44 50 94 100.00 100.00 100.00 Note: 1 = Gekbrong Sub-District 2 = Warungkondang Sub-District Table 17 showed distribution of rice millers both efficient and inefficient for all types. Overall, there was more numbers of efficient than inefficient of makloon type. It was occured in both sub-districts. Total number of efficient rice miller was 32 units of 53 units makloon type. As makloon type, overall, non-makloon type rice miller also had more numbers of efficient rice millers than inefficient. There were nine units of 14 units rice miller. However, in Gekbrong sub-district, number of rice miller between efficient and inefficient was quite balanced. While in the Warungkondang sub- district, seven units of ten non-makloon type were efficient. In the combination type, the number of efficient rice miller a little more than inefficient. The number of efficient rice miller was 16 of 27 units rice miller. Overall, 60.64 percent rice millers were efficient, which in 26 units were in Gekbrong and 31 units are in Warungkondang. Related to explanation above, rice milling industry was not meet one of efficiency requirements. This requirement stated that rice milling industry must achieved zero slack of all variables used. So, this study concluded that rice milling industry in study site was inefficient.

6.4 Comparative Test

This test was conducted to compare efficiency score of all rice millers in Gekbrong and Warungkondang of this study. ES of DEAP output indicated that all rice millers had same scores equal to one. Thus, this test was not necessary because all scores were not different significantly. Therefore, all rice millers can be analyzed in a single model. Similar ES also made all rice millers did not need to be processed separately by type. 7 CONCLUSION AND SUGGESTION This chapter is divided into two sections. First, it begins with the conclusion of this study. It describes an important point of the result related to the objective of this study. Second, it describes suggestion for further study related to result of this study.

7.1 Conclusion

Mostly, owner of rice millers were male, rice miller business as main job, and ownership of rice miller was private. Rice milling industry was dominated by makloon type. This type offered milling service to consumers and had small capacity. This study concluded that rice milling industry in study site was inefficient.

7.2 Suggestion

This study did not identify factors causing the value of slack. Thus, it could not identify factors affecting inefficiency of rice miller. Therefore, it needs further research to address this. It can uses other method or tools programs to examine the efficiency of rice miller and also determine factors affecting inefficiency of rice miller, conducting research in a different location, and so forth related to efficiency of rice milling industry to obtain information that are not captured in this study. Government is expected to conduct research on rice mill industry efficiency nationally. The research is addressed to obtain information the efficiency of various types of rice miller in all provinces. So, it can be used as consideration in determining the appropriate policy for this industry. Policies are not only consider producers farmers and consumers but also rice milling industry as an industry that linking producers and consumers in rice agribusiness system. 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