Purpose This study investigates the impact of agricultural land ownership on smallholder rice farmers’ technical efficiency and productivity in Banten, Indonesia. It aims to address the research gap concerning the specific link between land ownership and institutional/socio-economic factors, providing empirical evidence to inform policy-making for improving land tenure regulations, agricultural modernization, and rural poverty reduction in Indonesia. Design/methodology/approach A multistage sampling procedure was used to collect data from 497 smallholder rice farmers across four districts in Banten, Indonesia. The study employs an econometric approach, combining the Stochastic Production Frontier (SPF) model to analyze the determinants of technical efficiency and Propensity Score Matching (PSM) to estimate the causal effect of land ownership on technical efficiency and productivity. Findings Landowner farmers consistently exhibit higher technical efficiency and productivity. The SPF results indicate that farm size, fertilizer, seed, and labor are key factors in determining productivity. Access to extension services, credit, and training significantly reduces inefficiency. While extension services were accessed by both landowners and non-landowners at similar rates, landowners had significantly better access to credit, farmer groups, and training opportunities, which contributed to their higher efficiency and productivity. PSM analysis reveals that land ownership increases technical efficiency by 5.2 percentage points and productivity by 52.49 kg/ha. Research limitations/implications The consistent positive and significant impact of land ownership implies that investment in land ownership can optimize the potential impact on the technical efficiency and productivity of smallholder farmers. Originality/value This study uses a robust combined econometric approach (SPF and PSM) to provide novel empirical evidence on the causal impact of land ownership on technical efficiency and productivity among smallholder rice farmers in Banten, Indonesia. It links land ownership to a broader set of institutional and socio-economic factors, offering a comprehensive understanding of the dynamics often overlooked in previous research.
Amrullah et al. (Sat,) studied this question.