Thesis (BS Agribusiness Economics) University of the Philippines Mindanao, 2024

The Philippine cacao industry is a vital sector that provides a significant source of income, especially for smallholder farmers. Driven by the global demand for chocolate, the industry faces challenges, including production fluctuations and low yield. This study focuses on the measurement of technical efficiency and identification of farm management practices of smallholder cacao farmers in San Isidro, Davao del Norte, using cross-sectoral data. It was identified that high input costs is the major challenge faced by these farmers. Utilizing Stochastic Frontier Analysis (SFA), the study reveals that input costs per tree for chemicals such as fertilizers and pesticides, and farm size significantly increase yield. In terms of technical efficiency, factors such as ag, being a household head, years of cacao farming experience, and the use of organic and inorganic fertilizers were found to significantly affect efficiency levels. Specifically, squared aged and being a household head negatively influence technical efficiency. The analysis indicates that while technical efficiency maybe influenced by farm management practices, it is not entirely dependent on them. With an average technical efficiency practices, it is not entirely dependent on them. With an average technical efficiency score of 0.86, there is considerable room for improvement in production. The study highlights the potential for enhancing cacao productivity through targeted interventions, such as training programs on advanced farm management practices, especially focused on younger farmers. These measures would enable farmers to obtain high-quality inputs, contributing to the efficient of cacao production in Davao del Norte.