International Journal of Academic Research in Business and Social Sciences

search-icon

Technical Efficiency of Beef Cattle Farms in Peninsular Malaysia

Open access

Razida Hanem Mohd Radzil, Hanny Zurina Hamzah, Shaufique Fahmi Ahmad Sidique, Anjas Asmara @Ab. Hadi Samsudin

Pages 1032-1057 Received: 12 May, 2023 Revised: 15 Jun, 2023 Published Online: 17 Jul, 2023

http://dx.doi.org/10.46886/IJARBSS/v13-i7/8780
Beef cattle farming is a challenging business to operate locally because of its low performance. Different price of beef product around Peninsular Malaysia happens due to the various condition of beef sources in each state in Peninsular Malaysia. This research aims to investigate the technical efficiency of beef cattle farms and its determinants. Farm-level data from 334 beef cattle producers collected from August 2020 to February 2021 were analysed by Data Envelopment Analysis (DEA) for technical efficiency scoring and the determinants discovered by using Tobit Model regression. The results show only 28.78 per cent of the farms operates at a total score of 1.00 while 33.54 per cent of the farms score less than 0.50 in technical efficiency. Technically efficient farms depend on experiences, corporate networking, education, household income and natural breeding technique. The findings help the industry to upgrade the operation standard of the farm in Malaysia by promoting the usage of Artificial Insemination techniques for beef cattle breeding intensively and comprehensively, with the involvement of corporates body to invest in the industry as one of the gestures for supporting the food security agenda of the country. Besides, educated youth might be interested in joining this industry if training incentives are provided, tax reductions for agro-food producers and strong support groups with authority.
Abdullah, F. A., Ali, J., & Noor, M. S. Z. (2021). Factors influencing the adoption of innovation in beef cattle farming: A study in Peninsular Malaysia. IOP Conference Series: Earth and Environmental Science, 756(1). https://doi.org/10.1088/1755-1315/756/1/012021
Abdullah, F. A., Ali, J., Noor, M. S. Z., & Ghazali, A. H. A. (2021). Adoption of Innovation among Beef Cattle Farmers in Peninsular Malaysia. International Journal of Academic Research in Business and Social Sciences, 11(15), 134–143. https://doi.org/10.6007/ijarbss/v11-i15/10640
Abed, R., & Acosta, A. (2018). Assessing livestock total factor productivity: A Malmquist Index approach. African Journal of Agricultural and Resource Economics, 13(4), 297–306.
Anzar, M., Faroop, U., Mirza, M. A., Shadab, M., & Ahmad, N. (2003). Factors affecting the efficiency of artificial insemination in cattle and buffalo in Punjab, Pakistan. Pakistan Veterinary Journal, 23(3), 106–113. Retrieved from
https://www.researchgate.net/publication/26579387
Bhat, S. A. (2014). Technical Efficiency and Farm Size Productivity? Micro Level Evidence From Jammu & Kashmir. International Journal of Food and Agricultural Economics, 2(4), 27–49.
Chamhuri, S., Talib, B. A., Diana, N., & Idris, M. (2014a). Determinants of technical efficiency among cash-crop producers?: Evidence Determinants of technical efficiency among cash-crop producers?: Evidence from East Malaysia. IOSR Journal of Humanities and Social Science, 19(6), 64–69.
Chamhuri, S., Talib, B. A., Diana, N., & Idris, M. (2014b). Determinants of Technical Efficiency Among Cash-crop Producers?: Evidence Determinants of Technical Efficiency Among Cash-crop Producers?: Evidence from East Malaysia. IOSR Journal of Humanities and Social Science, 19(6), 64–69.
Cofre-Bravo, G., Klerkx, L., & Engler, A. (2019). Combinations of bonding, bridging, and linking social capital for farm innovation: How farmers configure different support networks. Journal of Rural Studies, 69(May), 53–64.
https://doi.org/10.1016/j.jrurstud.2019.04.004
Dakpo, K. H., Desjeux, Y., Jeanneaux, P., & Latruffe, L. (2019). Productivity, technical efficiency and technological change in French agriculture during 2002-2015: a Färe-Primont index decomposition using group frontiers and meta-frontier. Applied Economics, 51(11), 1166–1182. https://doi.org/10.1080/00036846.2018.1524982
David, J. O., Lionel, H., & Eric, R. (2014). Assessment of technical efficiency and its determinants in beef cattle production in Kenya. Journal of Development and Agricultural Economics, 6(6), 267–278. https://doi.org/10.5897/JDAE2013.0525
Ekowati, T., Prasetyo, E., & Handayani, M. (2018a). The Factors Influencing Production and Economic Efficiency of Beef Cattle Farm in Grobogan Region,Central Java. Journal of the Indonesian Tropical Animal Agriculture, 43(60), 76–84.
https://doi.org/10.14710/jitaa.43.1.76-84
Ekowati, T., Prasetyo, E., & Handayani, M. (2018b). The Factors Influencing Production and Economic Efficiency of Beef Cattle Farm in Grobogan Region,Central Java. Journal of the Indonesia Tropical Animal Agriculture, 43(1), 76–84.
Erkoc, T. E. (2012). Estimation Methodology of Economic Efficiency?: Stochastic Frontier Analysis vs Data Envelopment Analysis. International Journal of Academic Research in Economics and Management Sciences, 1(1), 1–23.
Ernie, M. M. A., Salleh, S. I., Zulkifli, I., Farid, Z. C. R., & Saifullizam, A. K. (2021). Review of Factors Influencing Local Beef Production in Malaysia Malaysian Beef Industry. The 2nd International Electronic Conference on Animals: Walfare, Policies and Technologies, (December), 1–18.
Gabdo, B. H., Abdlatif, I. Bin, Mohammed, Z. A., & Shamsuddin, M. N. (2014). Frontier EstimatorsComparative Estimation of Technical Efficiency in Livestock-Oil Palm Integration in Johor , Malaysia?: Evidence from Full and Partial. Journal of Agricultural Science, 6(3), 140–150. https://doi.org/10.5539/jas.v6n3p140
Gul, M., Yilmaz, H., Parlakay, O., Akkoyun, S., Bilgili, M., Vurarak, Y., & Hizli, H. (2018). Technical efficiency of dairy cattle farms in East Mediterranean Region of Turkey. Scientific Papers Series Management, Economic Engineering in Agriculture and Rural Development, 18(2), 213–225.
Hansson, H. (2008). Are larger farms more efficient? A farm level study of the relationships between efficiency and size on specialized dairy farms in Sweden. Agricultural and Food Science, 17(4), 325–337. https://doi.org/10.2137/145960608787235577
Hansson, H., & Öhlmér, B. (2008). The effect of operational managerial practices on economic, technical and allocative efficiency at Swedish dairy farms. Livestock Science, 118(1–2), 34–43. https://doi.org/10.1016/j.livsci.2008.01.013
Heinrichs, A. J., Jones, C. M., Gray, S. M., Heinrichs, P. A., Cornelisse, S. A., & Goodling, R. C. (2013). Identifying Efficient Dairy Heifer Producers Using Production Costs and Data Envelopment Analysis. Journal of Dairy Science, 96(11), 7355–7362. https://doi.org/10.3168/jds.2012-6488
Indra, M., Hamir, B., Harun, A., Farradia, Y., Abdul, B., & Othman, M. (2022). Understanding Malaysian Preference for Local Beef. Jurnal Logistik Indonesia, 6(2), 107–115.
Islam, M. S., Degu, N. Y., Haron, A. W., Jesse Abdullah, F. F., Wen Han, M. H., & Fitri, W. N. (2021). Growth and reproductive performance of the indigenous Kedah-Kelantan (KK) cattle: A review. Pertanika Journal of Tropical Agricultural Science, 44(1), 25–48. https://doi.org/10.47836/PJTAS.44.1.02
Isyanto, A. Y., Semaoen, M. I., & Hanani, N. (2013). Measurement of Farm Level Efficiency of Beef Cattle Fattening in West Java Province , Indonesia. Journal of Economics and Sustainable Development, 4(10), 100–105.
Jamison, D. T., & Moock, P. R. (1984). Farmer education and farm efficiency in Nepal: The role of schooling, extension services, and cognitive skills. World Development, 12(1), 67–86. https://doi.org/10.1016/0305-750X(84)90036-6
Johansson, H. (2005). Technical , Allocative ,and Economic Efficiency in Swedish Dairy Farms?: The Data Envelopment Analysis. XI:International Congress of the European Association of Agricultural Economists(EAAE),Copenhagen,Denmark,August 24-27,2005, 46(0), 1–17.
Latif, J., & Mamat, M. N. (2002). A financial study of cattle integration in oil palm plantation. Oil Palm Ind Econ Journal, 2(1), 33–34.
Lubis, R., Daryanto, A., Tambunan, M., & Purwati, H. (2014). Technical, Allocative and Economic Efficiency of Pineapple Production in West Java Province, Indonesia: A DEA Approach. IOSR Journal of Agriculture and Veterinary Science, 7(6), 18–23. https://doi.org/10.9790/2380-07631823
Ludena, C. E., Hertel, T. W., Preckel, P. V, & Nin-pratt, A. (2005). Disaggregate Productivity Growth in Livestock?: A Directional Malmquist Index Approach Disaggregate Productivity Growth in Livestock?: A Directional Malmquist. (765).
Madau, F. A., Furesi, R., & Pulina, P. (2017). Technical efficiency and total factor productivity changes in European dairy farm sectors. Agricultural and Food Economics, 5(1), 1–14. https://doi.org/10.1186/s40100-017-0085-x
Mendonca, F. S., MacNeil, M. D., Leal, W. S., Azambuja, R. C. C., Rodrigues, P. F., & Cardoso, F. F. (2019). Crossbreeding effects on growth and efficiency in beef cow-calf systems: Evaluation of Angus, Caracu, Hereford and Nelore breed direct, maternal and heterosis effects. Translational Animal Science, 3(4), 1286–1295.
https://doi.org/10.1093/tas/txz096
Mirdehghan, S. M. (2015). Relations Among Technical , Cost and Revenue Efficiencies in Data Envelopment Analysis. International Journal of Applied Mathematics, 45(4), 1–10.
Mohamed, Z., Hosseini, A., & Kamarulzaman, N. H. (2013). Analysis of Malaysian beef industry in peninsular Malaysia under different importation policies scenarios and rate management systems. Pertanika Journal of Social Sciences and Humanities, 21(August), 1–16.
Muhamad, M. F., & Man, N. (2014). Evaluation of Target Area Concentration (TAC) Programme in Malaysia’s Integrated Cattle and Oil Palm Farming. Journal of Food Products Marketing, 20(S1), 151–163. https://doi.org/10.1080/10454446.2014.921870
Najim, A., Amin, M. R., Karimand, S. M. R., & Mei, S. J. (2015). Small holder cattle farming in East Coast Economic Region ( ECER ), Malaysia?: Farmers ’ Perception on Type , Breed and Crosses. Journal of Dynamics in Agricultural Research, 2(4), 40–45.
Nwigwe, C., Okoruwa, V., Adenegan, K., & Olajide, A. (2016). Technical Efficiency of Beef Cattle Production Technologies in Nigeria?: A Stochastic Frontier Analysis. African Journal of Agricultural Research, 11(51), 5152–5161. https://doi.org/10.5897/AJAR2016.11744
Ouattara, W. (2012). Economic Efficiency Analysis in Côte d ’ Ivoire. American Journal of Economics, 2(1), 37–46. https://doi.org/10.5923/j.economics.20120201.05
Palacpac, E. P., & Valiente, E. M. (2023). Measuring Efficiencies of Dairy Buffalo Farms in the Philippines Using Data Envelopment Analysis. Journal of Buffalo Science, 12(January), 1–15. https://doi.org/10.6000/1927-520X.2023.12.01
Qushim, B., Gillespie, J., Bhandari, B. D., & Scaglia, G. (2018a). TECHNICAL AND SCALE EFFICIENCIES OF U . S . GRASS-FED BEEF PRODUCTION?: WHOLE-FARM AND ENTERPRISE ANALYSES. Journal of Agriculture and Applied Economics, 3(2018), 408–428. https://doi.org/10.1017/aae.2018.7
Qushim, B., Gillespie, J. M., Bhandari, B. D., & Scaglia, G. (2018b). Technical and scale efficiencies of u.s. grass-fed beef production: Whole-farm and enterprise analyses. Journal of Agricultural and Applied Economics, 50(3), 408–428. https://doi.org/10.1017/aae.2018.7
Serin, T., Ali, A. K., Amin, F. M., & Abidin, Z. Z. (2012). Panduan Pelaburan & Kos Pengeluaran Ternakan (1st ed.). Serdang,Selangor: Penerbitan MARDI.
Serin, T., Radam, A., Shamsudin, M. N., & Mohamed, Z. (2008). The Efficiency of Beef Cattle Production?: A Case Study in the Target Area of Concentration in Johor , Malaysia. Economic and Technology Management Review, 3(2008), 57–74.
Song, B., Robinson, G. M., & Bardsley, D. K. (2022). Hobby and part-time farmers in a multifunctional landscape: Environmentalism, lifestyles, and amenity. Geographical Research, 60(3), 480–497. https://doi.org/10.1111/1745-5871.12541
Sugiarto, M., Wakhidati, Y. N., Einstein, A., & Mulyadi, D. (2019). The Influence of Artificial Insemination ( AI ) Cost to Profitability of Beef Cattle Farming in Banjarnegara District , Central Java Province , Indonesia. IOP Conference Series: Earth and Environmental Science, 247. https://doi.org/10.1088/1755-1315/247/1/012046
Suhartini, S. H., Gunawan, E., Sinuraya, J. F., & Ilham, N. (2021). Participation of beef cattle farmers and the effect on production. IOP Conference Series: Earth and Environmental Science, 892(1). https://doi.org/10.1088/1755-1315/892/1/012081
Sukhairi, M., & Rasat, M. (2014). Perception of Oil Palm Estate Managers towards Oil Palm-Cattle Integration. International Journal of Science Commerce and Humanities, 2(3), 33–38.
Temoso, O., Ng’ombe, J. N., Bahta, S., & Hadley, D. (2023). Total factor productivity growth in livestock production in Botswana: what is the role of scale and mix efficiency change in beef production? Agrekon, 0(0), 1–14.
https://doi.org/10.1080/03031853.2022.2156899
Temoso, O., Villano, R., & Hadley, D. (2016). Evaluating the productivity gap between commercial and traditional beef production systems in Botswana. Agricultural Systems, 149, 30–39. https://doi.org/10.1016/j.agsy.2016.07.014
Tipi, T., Yildiz, N., Nargeleçekenler, M., & Cetin, B. (2009). Measuring the technical efficiency and determinants of efficiency of rice (Oryza sativa) farms in marmara region, Turkey. New Zealand Journal of Crop and Horticultural Science, 37(2), 121–129. https://doi.org/10.1080/01140670909510257
Trenkle, A., & Willham, R. . (1977). Beef Production Efficiency. Science, pp. 1009–1016.
Tutulmaz, O. (2014). The Relationship of Technical Efficiency with Economical or Allocative Efficiency?: An Evaluation. Journal of Research in Business and Management, 2(9), 1–12.
Wang, G., Lu, Q., & Capared, S. C. (2020). Social network and extension service in farmers’ agricultural technology adoption efficiency. PLoS ONE, 15(7 July), 1–14. https://doi.org/10.1371/journal.pone.0235927
Wantasen, E., Sintya, J. U., & Jein, R. L. (2022). Technical efficiency of beef cattle production in the regency of Minahasa Tenggara, province of North Sulawesi, Indonesia. GSC Advanced Research and Reviews, 12(2), 204–215.
https://doi.org/10.30574/gscarr.2022.12.2.0211
Zainalabidin, M., Anahita, H., & Hirawaty, N. K. (2013). Analysis of Malaysian Beef Industry in Peninsular Malaysia Under Different Importation Policies Scenarios and Rate Management Systems. Pertanika Journal of Social Science and Humanities, 21(S), 1–16.
Zainalabidin, M., Anahita, H., & Hirawaty, N. K. (2016). Analysis of Malaysian Beef Industry in Peninsular Malaysia under Different Importation Policy. Pertanika Journal of Social Science and Humanity, 21(August 2013), 1–16.