Technical Efficiency and Managerial Implications of Para Rubber Production in Upper Northern Thailand

Abstract

Rubber is a vital economic crop for Thailand, which is one of the world’s major producers and exporters of natural rubber. This has led to a continuous expansion of rubber production, particularly in the Upper Northern region, where rubber plantations are widespread. However, it has been found that the yield per rai in this region has significantly declined compared to other parts of the country. This study aims to examine the characteristics and measure the technical efficiency of rubber production, as well as to analyze the factors contributing to technical inefficiency in rubber cultivation in the Upper Northern region of Thailand. Data were collected from 400 rubber farmers across five districts—Chiang Kham, Phu Sang, Chiang Dao, Fang, and Chiang Khong—located in the provinces of Phayao, Chiang Mai, and Chiang Rai. The analysis employed the Stochastic Production Frontier approach to estimate technical efficiency, while the Tobit model was used to identify the factors affecting technical inefficiency in rubber production at the 90% and 95% confidence levels. The results revealed that the technical efficiency of rubber farming, as measured by Stochastic Frontier Analysis (SFA), was very high (0.901–1.000) among most farmers in Chiang Kham (Phayao), Chiang Dao (Chiang Mai), and Chiang Khong (Chiang Rai). In contrast, farmers in Phu Sang (Phayao) and Fang (Chiang Mai) demonstrated high levels of technical efficiency (0.701–0.900). Significant factors contributing to technical inefficiency included the number of training sessions attended, farming experience, employment of tapping labor, and the amount of rainfall in the cultivation area. The findings of this research can be used as a guideline to drive development and enhance technical efficiency, while also offering management recommendations for rubber production in the northern region of Thailand.