Economic efficiency of beef cattle farms in Peninsular Malaysia

Abstract

Numbers of beef cattle farmers in Peninsular Malaysia were decreasing from 2016 to 2018 but there were increasing number of beef cattle farms on the years. Beef cattle farming is a costly business to operate locally because of its low performance, strong competitions with other high value agricultural activities, especially palm oil, cheaper prices of imported beef, and price elasticity that leads consumers towards other protein sources substitutes such as fish, poultry, mutton, and pork. The objective of the study is to measure the economic efficiency of beef cattle farms and identifying its determinants. Farm level data from 334 of beef cattle farmers collected in year 2020 were being analysed by Data Envelopment Analysis (DEA) for economic efficiency scoring. The determinants of the efficiency discovered using Tobit Model regression. The results show only 9.28 percent of the farms operate in the full economic efficiency while 44.31 percent of the firms were at the lowest range of economic efficiency score. The economic efficient farms depend on its financial aid, online networking, veterinary networking, job status, and the farm system. Government support by empowerment of smallholders through entrepreneurship skills were one of the suggestions for the industry to sustain economically. The research had justified the economic efficiency of beef cattle farms in Peninsular Malaysia with its determinants.