Technical Efficiency and Profitability of Cabbage Production in Brgy. Mamala 1, Sariaya, Quezon, 2023-2024 Planting Season

Date

1-2025

Degree

Bachelor of Science in Agricultural Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Antonio Jesus A. Quilloy

Committee Member

Geny F. Lapiña, Maria Angeles O. Catelo

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Abstract

This study examined the technical efficiency and profitability of cabbage production in Brgy. Mamala 1 in an attempt to identify gaps in the production process that can be used as starting points in improving profitability. Using a complete enumeration of 32 cabbage farming households who planted cabbage in the 2023-2024 planting season, the study’s specific objectives were (i) to describe the input utilization and cultural management practices of cabbage production in Brgy, Mamala 1; (ii) to determine the factors affecting production and technical efficiency; and (iii) to evaluate the profitability of cabbage production using selected financial ratios.

The study performed a stochastic frontier analysis to jointly estimate the parameters of a frontier Cobb-Douglas cabbage production function and a technical inefficiency function. This was followed by a profitability analysis involving the construction of a costs and returns table and the calculation of the net farm income, gross margin, net cash income, and return on investment.

The results of the stochastic frontier analysis showed that cabbage yield was positively affected by seeds, hired labor, family labor, cypermethrin, profenofos, and capital investment, but negatively affected by the quantity of nitrogen fertilizer applied. The large magnitude of the negative coefficient for the quantity of nitrogen fertilizer applied could mean that the current level of nitrogen application among the cabbage producers is already causing significant yield losses.

The mean technical efficiency rating of the cabbage producers is 62 percent, indicating that technical inefficiency amounting to 38 percent exists in the production process. Technical efficiency ratings were lower for large farms, small households, and producers characterized as old, female, non-members of active farming organizations, non- users of credit, non-leasehold tenants, and holders of multiple income sources. Producers with longer years of experience were also less technically efficient, contrary to the expectation that experience brings more efficiency. Producers’ participation in training programs was not a significant determinant of technical efficiency.

Cabbage production during the 2023-2024 planting was not profitable based on the negative values of all four financial ratios. Reducing the use of hired labor and nitrogen are strongly recommended because they comprise some of the largest cost shares in production at 53 percent and 11 percent of the total cost, respectively. Input use reductions should be complemented with improvements in technical efficiency so that cabbage producers can still meet their yield targets despite the lower level of input use. The results of the study found out that if the selling price of cabbage is held constant, cabbage production in the area will still be unprofitable if technical inefficiencies and excessive production costs are not addressed. Moreover, the study is also able to demonstrate that although cabbage production is generally exposed to random disturbances beyond producers’ control (e.g., weather events and pests), producers can still gain adequate returns by bridging the management gaps caused by inefficiency. This not only requires initiatives at the farming household-level, but policy intervention as well due to the wide range of demographics exhibiting technical inefficiency.

Language

English

LC Subject

Cabbage industry, Production management

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993.5 2025 A14 V46

Notes

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Document Type

Thesis

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