Environmental–Socioeconomic Factors and Technology Adoption: Empirical Evidence from Small-Scale Salt Farmers in Improving Technical Efficiency in the Madurese Coastal Area, East Java, Indonesia

Abstract

Salt farming has been a hereditary occupation in the coastal communities of Madura Island; however, salt productivity in this area is still relatively low. The government has introduced a new production technology, called a geomembrane, as part of their efforts. The application of the latest technological innovations has been promoted worldwide to increase farm productivity, including in salt farming. This research aims to determine the determinants of adoption decisions for salt production technology and estimate the adoption impact on technical efficiency. The data in this study are cross-sectional from 215 small-scale salt farmers on Madura Island, East Java, Indonesia. The data were analyzed using logistic regression to identify which factors influenced farmers’ decisions to use geomembranes. The influence of adoption on farmers’ technical efficiency was then assessed using propensity score matching (PSM) and data envelopment analysis (DEA). The findings indicate that age and the dummy variables of gender, land ownership, profit-sharing involvement, and membership in the People’s Salt Business Group (KUGAR) all had a significant impact on adoption rates. The findings of controlling matched samples using the PSM process reveal that geomembrane application improves and greatly increases farmers’ technical efficiency. Those who used geomembranes displayed greater technical efficiency than those who did not. These findings imply that salt production technology should be promoted more to increase productivity, especially geomembrane adoption, through outreach and dissemination of information, including for landowners involved in the profit-sharing system. The government should keep supporting salt farmers and motivate them to adopt geomembrane technology to ensure the sustainability of salt production in the coastal communities on Madura Island.