Competitiveness and Efficiency of Rice Production in Malaysia
by Fazleen Abdul Fatah
Date of Examination:2017-02-03
Date of issue:2017-02-24
Advisor:Prof. Dr. Stephan von Cramon-Taubadel
Referee:Prof. Dr. Bernhard Brümmer
Referee:Prof. Dr. Reimund Roetter
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Abstract
English
Rice is one of the most essential staple foods for a large part of the world’s human population and has a large influence on human nutrition, the livelihood and food security of several billion people living across the globe. Similar to other Asian countries, the rice crop plays an important role in Malaysian society as it fosters agricultural activity and is a major source of employment for many Malaysian farmers. However, the advent of free trade agreements, including the Asean Free Trade Agreement (AFTA) and the WTO accession, pose challenges for the Malaysian rice production as the sector must compete with low-cost exporting countries. This outcome implies the need for not only structural changes in trade, but also adjustments at the farm level to improve efficiency and competitiveness. Further developments in the rice sector will therefore depend on the availability of sufficient, relatively low-cost and high-quality rice, or in other words, on the competitiveness of rice production. In line with that, the primary objective of this dissertation is to look into a competitiveness assessment of rice production in Malaysia. Furthermore, the work aims to analyze the changes in farm level efficiency over time for rice farms in Malaysia and to gain insight into the factors that determine the distribution of efficiency and competitiveness. Finally, by establishing the linkage between both comparative advantage/competitiveness and technical efficiency, the results of this research would then provide us with a foundation for understanding the information, the measurements and the characteristics associated with each method and how this link may contribute to explaining competitiveness. Overall, this newly accumulated knowledge has the potential to guide the direction of the policy’s effects. In order to achieve the established goals, the dissertation adopts a new extension to the Policy Analysis Matrix approach proposed by Monke and Pearson (1989) using farm level survey data. The measurement of competitiveness in agriculture is often based on the average farms or aggregate data. If the farms that are summarized in this manner are heterogeneous, inferences based on aggregated measure can be misleading. As means of addressing misrepresentative information and the pitfalls of using aggregated data, this extension will allow us to take farm level heterogeneity into account and study the distributions of the competitiveness scores for each rice farm. Subsequently, we conduct an empirical technical efficiency analysis with unobserved heterogeneity and employ a recent fixed effect model. The static decomposition of competitiveness, which is presented by linking comparative advantage/competitiveness and technical efficiency, concludes this PhD dissertation.
Keywords: competitiveness; efficiency; Rice