Bridging the Yield and Efficiency Gap of Smallholder Rice Farming in Rote Ndao, Semi-Arid Eastern Indonesia

Abstract

Smallholder rice farming in the semi-arid archipelagos of Eastern Indonesia faces a dual challenge of ecological vulnerability and allocative inefficiency. This study examines the production structure and economic performance of 40 rice farming households in Rote Ndao Regency using a Cobb-Douglas production function and farm-level financial analysis. The objective is to estimate the elasticity of key inputs, namely land, seed, fertilizer, pesticide, and labor, and to derive policy-relevant implications for closing the yield and efficiency gaps. The estimated model indicates Increasing Returns to Scale (RTS = 1.05), suggesting the presence of scale economies and structural constraints associated with fragmented landholdings. Land size is the dominant determinant of output ), while fertilizer  and labor   exhibit low elasticities, reflecting diminishing marginal returns and inefficiencies in nutrient management and labor use. Financial analysis shows that rice farming is economically viable, with an R/C ratio of 2.70, yet average farm-level productivity of about 3.8 tons per hectare remains substantially below the district-level potential of around 5.0 tons per hectare. The coexistence of scale inefficiency, low input responsiveness, and a persistent yield gap indicates that productivity constraints are primarily structural rather than purely agronomic. The study therefore advocates a cluster-based intensification strategy emphasizing land consolidation, balanced fertilization, and targeted mechanization to enhance input efficiency, exploit scale economies, and improve the sustainability and competitiveness of smallholder rice systems in semi-arid Eastern Indonesia.