Factors Influencing the Technical Efficiency of Smallholder Cacao Farmers in Davao de Oro, Philippines

With its ideal agro-climatic conditions in the “cacao belt,” the Philippines has high productivity potential for cacao. However, the country struggles to meet rising domestic and international demands with its low productivity due to pests, soil infertility, and inadequate farmer knowledge. The Davao region is the country’s top cacao producer, but some of its areas still experience low productivity. Hence, it is critical to understand the region’s production capacities and probe the underlying factors behind this. Using Data Envelopment Analysis (DEA), the technical efficiency (TE) of cacao farmers from Davao de Oro was estimated. Tobit regression was used to analyze factors affecting TE. Findings suggest that education, farm experience, and income from cacao improve efficiency; while age, pod sleeving, number of coconut crops intercropped, subsidies, extension services, and total household income negatively impact it. This study recommends enhancing collaboration among the government, public, and private sectors to address these challenges, focusing on infrastructure, market linkage, and technical training. Formal education must also be promoted. Cacao farm rehabilitation and continuous research are also crucial in reducing risks of pest and disease infestations and further promote efficiency. Lastly, regular monitoring and assessment of these strategies are essential to ensure the effectiveness and sustainability of the industry.