Impact of contract farming on the technical efficiency of Broiler Farmers in Indonesia

The objective of this paper is to estimate the effect ofContract Farming (CF) on the efficiency of broiler farmersin Indonesia. We used comprehensive socio-economic data of438 broiler farmers in Indonesia. To achieve the objective weused causal-comparative research (CCR) design. Stochasticfrontier production (SFP) employed to estimate farm efficiency.Then, the effect of CF on farm efficiency was estimated usingpropensity score matching (PSM). The results showed thatthe average technical efficiency of broiler farmers is 74.22%.Participation in CF increases TE by 7.4% and chick productivityby 12.5%. A policy that promotes farmer participation in CFis likely to improve the efficiency of broiler farmers since it isassociated with improved input use intensity. [Publisher's text]