Production function analysis of green onions in Merdeka Subdistrict, Karo Regency, North Sumatera Province

Abstract

Green onions were the most widely cultivated commodity in Merdeka Subdistrict. Unfortunately, green onions productivity in Karo Regency was below other regions in Java. This study aimed to analyse the effect of variables of land area, seed, labour, fertilizer, and technology on green onions production, and analyse the efficiency of those production factors. The data was analysed by the Ordinary Least Square method with Cobb-Douglas’s production function. The results of the analysis showed that in Model-1 (with a dummy variable of technology included), the variables of land area, seed, and labour had a positive significant effect. In Model-2 (without a dummy variable of technology included), the variables of land area and seed had a positive significant effect. In Model-3 (for farmers with land area < 1000 m2), the variables of seed, labour, and fertilizer had a positive significant effect, while land area was insignificant. Estimations on the three models showed irrational or inefficient production areas or increasing returns to scale. In Model-4 (for farmers with land area > 1000 m2), the variables of land area and seed had a positive significant effect, while labour and fertilizer were insignificant with rational or efficient production areas or decreasing returns to scale.