A determinant of marketing system choice by rubber smallholders in Indonesia

Mirza Antoni, Hiromi Tokuda

Abstract: The objective of the research was to determine the driving factors behind rubber smallholders’ decision to sell their rubber material either by a Processing and Marketing Unit (PMU) or by a non-PMU marketing system. The study population comprised 240 farmers, half of which represented the PMU members and the rest were non-PMU smallholders. These were interviewed to record the farming behavior of smallholders in the largest rubber production area in Indonesia, namely South Sumatera Province. T-test analysis was used to analyze for different characteristic and a binary logistic regression equation to determine factors affecting choice of the marketing system. Research results showed that formal education of household head, rubber price and income of PMU members was higher than that of non-PMU members, while rubber farming experience of non-PMU members was greater than PMU members. Land acreage and its production, plus age of the household head and family size were not significantly different between PMU members and non-PMU members. Age of the household head, formal education, land acreage and rubber income seemed to be the main driver that increased the likelihood of being a PMU member as compared to family size, rubber production, and rubber farming experience. Efforts for more smallholders are interested to join as a member of the PMU is by conducting intensive agriculture extension to them about the benefits of PMU and providing rural economy finance institutions such as credit unions managed by co-operatives.

Keywords: marketing unit; organized marketing; processing; smallholders

Date published: 2019-08-27