The Impacts of Certified Seed Plant Adoption on the Productivity and Efficiency of Smallholder Sugarcane Farmers in Indonesia

Abstract

The development of a certified seed plant (CSP) to increase the production of sugarcane cultivation is one of the primary efforts of the Indonesian government. The purpose of this study was to evaluate the impact of CSP adoption on the productivity and efficiency of smallholder sugarcane farmers in Indonesia. This study used data from the 2014 Indonesian Plantation Farm Household Survey consisting of 3849 farmers. We used propensity score matching to evaluate the impact of CSP adoption on the productivity and technical efficiency of sugarcane farming. We found that the adoption of CSPs increases the productivity of sugarcane farming. The average yield of the farmers who adopt CSPs is 88.24 tons/ha while the average yield of those who do not adopt CSPs is 82.94 tons/ha. Additionally, the adoption of CSPs increases the technical efficiency of sugarcane farming. The average efficiency of the farmers who adopt CSPs is 78.31%, while the nonadopting farmers have a technical efficiency of 76.44%. These results suggest that the current policy regarding CSP adoption has been on the right track. However, the government should encourage farmers to exercise good farming practices since the technical efficiency is low. Additionally, since the current rate of adoption is only 18.13%, the government should prioritize policies encouraging the adoption of CSPs.