Competitiveness of Smallholder Rice Farming: Evidence from Private Profitability in Indonesia
DOI:
https://doi.org/10.30737/agrinika.v10i2.7873Keywords:
: size of farming; cost competitiveness; cost of production; private profitability; rice farming.Abstract
This study analyses the relationship between the size of farming, cost competitiveness, and private profitability in rice farming in Musi Rawas Regency. Cross-sectional data were obtained from 228 farms in the first planting season in 2024. Farmers are grouped based on harvest area into ≤0.50 ha, >0.50–1.00 ha, and >1.00 ha. The analysis used descriptive statistics, the Kruskal–Wallis test, the comparison of pairs with the Holm correction, and ordinary least squares regression with the standard error HC3 and the sub-district fixed effect. Profitability is also decomposed into price channels and production costs per unit. The results showed that the median total cost per hectare decreased from Rp6.41 million in the smallest group to Rp5.81 million and Rp3.14 million in the wider group. The difference is statistically significant. Production costs per kilogram also differed between groups, but consistent differences were mainly found between very small groups and medium groups. In the multivariate model, the size of farming is strongly associated with a decrease in cost per hectare. Still, the relationship with cost per unit and R/C ratio is not significant at the conventional level. The selling price also does not show a meaningful relationship with the size of the farm. Decomposition suggests that the pattern of positive relationships between business size and profitability is more consistently explained by a decrease in cost per unit than a price increase, although the statistical evidence is inconclusive. These findings show a cost advantage by size of the business, but do not prove that land expansion directly increases profitability. Policy implications are directed at operational consolidation, the use of shared tools and machinery, the procurement of collective inputs, and better irrigation management.
References
Abuseeds, O., & Campus, M. (2024). Yuzuncu Yil University Journal of Agricultural Sciences Employing the Cobb-Douglas Function Model to Examine How Input Allocation Affects Rice Production : In Search of Ways to Improve the Rice Farming Management. 34(4), 584–595. https://doi.org/10.29133/yyutbd.1492753
Aminah, M., Panjaitan, D. V., & Cahyadi, E. R. (2026). The Role of Fertilizer Subsidies in Rice Productivity and Profitability : Evidence from Indonesian Smallholder Farmers. 15(1), 83–108. https://doi.org/https://doi.org/10.15408/sjie.v15i1.50435
Antriyandarti, E. (2015). Competitiveness and Cost Efficiency of Rice Farming in Indonesia. 51(2), 74–85. https://doi.org/10.7310/arfe.51.74
Antriyandarti, E., & Fukui, S. (2016). Economies of Scale in Indonesian Rice Production : An Economic Analysis Using PATANAS Data. 52(4), 259–264. https://doi.org/10.7310/arfe.52.259
Ariani, M., Tarigan, H., Suhartini, S. H., Ariningsih, E., Suryani, E., Mardianto, S., Selatan, J., Khusus, D., Riset, P., Sosial, K., Selatan, J., Jakarta, D. K., Pertanian, K., & Barat, J. (2025). Analisis Kebijakan Pertanian. 23(2), 195–216. https://doi.org/10.21082/akp.v23n2.2025.195
Baga, L. M., Utami, A. D., & Wahyudi, A. F. (2023). Exploring the Relation between Farmer Group Membership and Agricultural Productivity : Evidence from Indonesian Rice. 9(1), 65–78. https://doi.org/https://doi.org/10.18196/agraris.v9i1.115
Billah, S., Dewi, L., Aulia, R. V., & Laily, D. W. (2024). Implementasi Pertanian Berkelanjutan dengan Memanfaatkan Limbah Pertanian menjadi Pupuk Organik Cair di Desa Musir Lor Kabupaten Nganjuk. 4(4), 1067–1076.
Dewi, C. A., Siagian, M. F., & Firmansyah, A. (2024). Apakah Perizinan Berdampak Pada Keberlanjutan Perusahaan Kelapa Sawit? Journal of Law, Administration, and Social Science, 4(4), 659–670. https://doi.org/10.54957/jolas.v4i4.778
Dewi, Y. A., Bahru, B. A., & Zeller, M. (2026). Revealing the effect of agricultural interventions on technical efficiency : empirical evidence from Indonesian smallholder rice farmers. 1, 1–22. https://doi.org/https://doi.org/10.1186/s40100-026-00454-1
Erythrina, E., Anshori, A., Bora, C. Y., Dewi, D. O., Lestari, M. S., Mustaha, M. A., Ramija, K. E., Rauf, A. W., Mikasari, W., & Surdianto, Y. (2021). Assessing Opportunities to Increase Yield and Profit in Rainfed Lowland Rice Systems in Indonesia. 1–15.
Husna, H., Azis, Y., & Fauzi, M. (2020). Efisiensi teknis usahatani padi sawah pasang surut varietas lokal di Kecamatan Barambai Kabupaten Barito Kuala: pendekatan Dea. Journal of Agricultural Socio-Economics (JASE), 1(2), 76. https://doi.org/10.33474/jase.v1i2.9121
Latruffe, L. (2010). Competitiveness , Productivity and Efficiency in the Agricultural and Agri- Food Sectors. 30. https://doi.org/http://dx.doi.org/10.1787/5km91nkdt6d6-en OECD.
Marendra, A., Muhammad, K., Hidayat, Y., Cahyana, D., & Yusuf, Y. (2026). Unravelling systemic challenges in the governance of subsidized fertilizer allocation and distribution for rice production in Indonesia : a systems thinking approach. 8. https://doi.org/https://doi.org/10.1007/s44447-025-00114-8
Phan, N. T., Lee, J., & Kien, N. D. (2022). The Impact of Land Fragmentation in Rice Production on Household Food Insecurity in Vietnam. 1–12. https://doi.org/https://doi.org/10.3390/ su141811162 Academic
Rahmawati, N., & Rozaki, Z. (2021). Sustainable value of rice farm based on economic e ffi ciency in Yogyakarta , Indonesia. 563–572.
Ramadani, S. W., Antriyandarti, E., Rara, R., & Qonita, A. (2024). E ffi ciency of rice farming in fl ood-prone areas of East Java , Indonesia. https://doi.org/https://doi.org/10.1515/opag-2022-0284
Rondhi, M., Jessica, S., Suherman, H., Hensie, C. B., Ulum, S., Suwandari, A., Mori, Y., & Kondo, T. (2024). Urbanization Impacts on Rice Farming Technical Efficiency : A Comparison of Irrigated and Non-Irrigated Areas in Indonesia. 1–16.
Siagian, R. A., & Soetjipto, W. (2020). Cost Efficiency Of Rice Farming In Indonesia : Stochastic Frontier Approach. XX(1), 7–14.
Siagian, U. W. R., Wenten, I. G., & Khoiruddin, K. (2024). Circular Economy Approaches in the Palm Oil Industry: Enhancing Profitability through Waste Reduction and Product Diversification. Journal of Engineering and Technological Sciences, 56(1), 25–49. https://doi.org/10.5614/j.eng.technol.sci.2024.56.1.3
Sumaryanto, S., Susilowati, S. H., Saptana, S., Sayaka, B., Suryani, E., Agustian, A., Ashari, A., Purba, H. J., Sumedi, S., Dermoredjo, S. K., Purwantini, T. B., & Yofa, R. D. (2023). Technical e ffi ciency changes of rice farming in the favorable irrigated areas of Indonesia. 3. https://doi.org/https://doi.org/10.1515/opag-2022-0207
Yuan, S., Stuart, A. M., Laborte, A. G., Edreira, J. I. R., Dobermann, A., Vu, L., Kien, N., Paothong, K., & Traesang, P. (2022). continue to be a major rice bowl. 3(March). https://doi.org/10.1038/s43016-022-00477-z
Zhu, H., Nie, L., He, X., Wang, X., Long, P., & Chen, H. (2024). Synergistically Enhance the Yield , Rice Quality and Lodging.
Published
Issue
Section
License
Copyright (c) 2026 Nila Suryati, Dr. Verry Yarda Ningsih, SP., M.Si
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Authors who publish in this journal agree to the following terms:
- Authors retain copyright with the work simultaneously licensed under a Creative Commons Attribution License (https://creativecommons.org/licenses/by-nc-nd/4.0/) that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal. Permitted third-party reuse is defined by the Creative Commons Attribution-NonCommercial-NoDerivs (CC BY-NC-ND). This permission allows users to copy and distribute the Article, provided this is not done for commercial purposes and further does not permit distribution of the Article if it is changed or edited in any way, and provided the user gives appropriate credit (with a link to the formal publication through the relevant DOI), provides a link to the license, and that the licensor is not represented as endorsing the use made of the work.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work.
How to Cite
