An Economic Analysis of Peasant Rice Farming in Kelantan, Malaysia

Abstract

This study deals with rice farming in a long-established double-cropping area in Kelantan where, although rice production is the most important source of income, the average yield per acre is much lower than the national average. Production costs, profitability of rice farming, and the role of material inputs in rice production are analyzed, based on data obtained from a farm management study in a Kelantan village. Low productivity and comparatively high production costs result in negative net profit but barely positive returns to family labour, farm assets and entrepreneurship, while the use of material inputs seems to be below optimum level. This is economically interpreted as the stagnation of rice production, in that farmers lack capital to improve their rice farming which, in turn, fails to generate economic profit.