• Na’imah Ali Faculty of Computer and Mathematical Sciences Universiti Teknologi MARA Shah Alam, Selangor, Malaysia
  • Noor Asiah Ramli Faculty of Computer and Mathematical Sciences Universiti Teknologi MARA Shah Alam, Selangor, Malaysia
  • Faridah Zulkipli Faculty of Computer and Mathematical Sciences Universiti Teknologi MARA Tapah, Perak, Malaysia



Rubber smallholders, Data Envelopment Analysis (DEA), Constant Return to Scale (CRS), Variable Return to Scale (VRS), Pure Technical Efficiency (PTE)


RISDA has targeted for the income of each smallholder to be at least RM2500 per month by the end of 2015. However, approximately almost 90% of the smallholders’ monthly income is still below the target. Hence, in order to observe if this target is achievable, a study was conducted to evaluate the efficiency level of producing rubber among 95 rubber smallholders in Pahang. In addition, the study also investigated if there was any opportunity for increment of production among the rubber smallholders. Therefore, the Data Envelopment Analysis (DEA) model, under the assumption of Variable Return to Scale (VRS) and Constant Return to Scale (CRS), was used to analyse the scale and the technical efficiency of the smallholders. Scale Efficiency was measured in order to estimate the return to scale of the smallholders. As a result, the study found that the average Overall Technical Efficiency (OTE) and Pure Technical Efficiency (PTE) scores of the smallholders were 43.47% and 43.78%, respectively. Thus, the majority of the smallholders were not technically efficient in producing rubber. Furthermore, based on the return to scale estimated, 41% of the smallholders were operating under the Increase Return to Scale (IRS), which implied that the smallholders had a sub-optimal scale size. The results obtained had been useful as the optimal input-output for the efficient rubber yield can be determined and may help RISDA, as well as agricultural planners, to devise a strategy in order to increase the productivity of rubber smallholders in Malaysia.   


Mohammad, A. F. and Sarjiman, Y. 2007. Reviewing Rubber: Are We Losing Our Grips? Department of Statistic Malaysia, 2007.

Rubber Industry Smallholders Development Authority (RISDA) Official Portal. 2014. Retrieved December 29, 2014, from

Mustapha, N. H. N. 2011. Technical Efficiency For Rubber Smallholders Under RISDA’s Supervisory System Using Stochastic Frontier Analysis. Journal of Sustainability Science and Management. 6(1): 156-168.

Bikker, J. A. 1999. Efficiency In The European Banking Industry: An Exploratory Analysis To Rank Countries. Amsterdam: De Nederlandsche Bank.

Sherman, H. D. 1984. Hospital Efficiency Measurement And Evaluation: Empirical Test Of A New Technique. Medical Care. 22(10): 922-938.

Berger, A. N. and Humphrey, D. B. 1997. Efficiency Of Financial Institutions: International Survey And Directions For Future Research. European Journal Of Operational Research. 98(2): 175-212.

Charnes, A., Cooper, W. W. and Rhodes, E. 1978. Measuring The Efficiency Of Decision Making Units. European Journal Of Operational Research. 2(6): 429-444.

Sexton, T. R. and Lewis, H. F. 2012. Measuring Efficiency In The Presence Of Head-To-Head Competition. Journal of Productivity Analysis. 38(2): 183-197.

Talluri, S., Vickery, S. K. and Droge, C. L. 2003. Transmuting Performance On Manufacturing Dimensions Into Business Performance: An Exploratory Analysis Of Efficiency Using DEA. International Journal of Production Research. 41(10): 2107-2123.

Canhoto, A. and Dermine, J. 2003. A Note On Banking Efficiency In Portugal, New Vs. Old Banks. Journal of Banking & Finance. 27(11): 2087-2098.

Moffat, B. D. and Valadkhani, A. 2011. Efficiency Of Botswana's Financial Institutions: A Data Envelopment Analysis. Applied Economics Letters. 18(7): 697-702.

Kumarasinghe, H., Edirisinghe, J. C. and Patalee, M. A. B. 2012. Role Of Human Capital In Efficiency Increases: Evidence From A Data Envelopment Analysis Of Rubber Smallholdings In Gampaha District. Journal of the Rubber Research Institute of Sri Lanka. 92: 12-21.

Edirisinghe, J., Wijesuriya, W. and Bogahawatte, C. 2010. Profit Efficiency Of Smallholder Rubber Farmers In Kegalle, Kalutara And Ratnapura Districts. Journal of the Rubber Research Institute of Sri Lanka. 90: 64-77.

Januri, S. S., Zulkipli, F. and Yasin, Z. A. M. M. 2012. Analysis On Productivity Achievement Of Rubber Industry In Selangor. IEEE In Humanities, Science and Engineering (CHUSER). 508-512.

Akpan, A. U., Edem, S. O. and Ndaeyo, N. U. 2007. Latex Yield of Rubber (Hevea brasiliensis Muell Argo) as Influenced by Clone Planted and Locations with Varying Fertility Status. Journal of Agriculture and Social Science. 3.

Zulkipli, F., Rani, R. M. and Januri, S. S. 2011. Performance Measurement in Selangor Foods and Beverages Industry. International Proceedings of Economics Development & Research. 21.

Banker, R. D., Charnes, A., and Cooper, W. W. 1984. Some Models For Estimating Technical And Scale Inefficiencies In Data Envelopment Analysis. Management Science. 30(9): 1078-1092.

Färe, R., Grosskopf, S. and Lovell, C. K. 1985. The Measurement Of Efficiency Of Production. Springer.

Färe, R., Grosskopf, S. and Lovell, C. K. 1994. Production frontiers. Cambridge University Press.

Banker, R. D. and Morey, R. C. 1986. Efficiency Analysis For Exogenously Fixed Inputs And Outputs. Operations Research. 34(4): 513-521.




How to Cite