Allocative Efficiency Analysis of Katokkon Chili Production in Tana Toraja and North Toraja Districts

Abstract

Abstract This study aims to measure the allocative efficiency of inputs or production factors in katokkon chili farming with climate-friendly organic farming. This research was conducted in five villages spread across two districts, Tana Toraja and North Toraja, South Sulawesi. This study involved 100 respondents from each village with a census sampling method. The methods used in this study are Cobb-Douglas Stochastic Frontier and allocative efficiency analysis (AEA). The results showed that of the six variables contained in the Cobb-Douglas equation, Land Area (X1), Labor (X2), Compost (X3), Liquid Organic Fertilizer (X4), Vegetable Pesticides (X5), and Farm Capital (X6), only the allocation of farm capital (X6) did not have a significant effect on the production of katokkon chili (Y) in Tana Toraja and North Toraja. Furthermore, the five variables that had a significant effect on the production of katokkon chili were again tested in allocative efficiency analysis, with results showing that the allocative use of Compost, liquid organic fertilizer, and vegetable pesticides was considered efficient or by the usage procedure with the value of NPM / Px = 1. In comparison, the other variables, land area and labor, were allocative, not optimal NPM / Px >1. Hence, increasing land by an average of 72.69 m2 and a workforce of 39.95 HOK was necessary to achieve allocative efficiency.