Contract Farming and The Effect on Price Risk in Broiler Farming

Abstract

Contract farming is one of the ways in a production relationship that is carried out by at least two parties who work together for a certain unit of time arranged in a written or oral agreement. Contracts in agriculture are carried out to reduce the risks faced by both parties. There are several agriculture commodities developed under the contract farming system, one of which is broiler. Broiler are important for fulfilling animal protein. High consumption in Indonesia at 2012-2016, not supported by production and the price of broiler has large fluctuations. Large fluctuations in Jember at 2012-2016 illustrate the magnitude of the risk in broiler farming both the risk of production and price. The amount of risk borne by farmerss causes easy contract farming to be applied in broiler chicken farming. This study purpose to see: (1) The pattern of contract farmIng carried out on broiler farming; and (2) The effect of contract farming on the price risks faced by farmerss. Method of determining the research area is purposive method. The research method is carried out by descriptive and analytical. The method of data collection is by interview, observation and secondary data with the use of recapitulation of the results of farmers maintenance. Determination of respondents was conducted randomly at farmerss in Jember Regency. The results of the study show: 1) The pattern of contract farming carried out on broiler farming is a contract farming with the type of production contract; and (2) The effect of contract farming causes the risk faced by farmerss to be reduced by 39% than independently farmerss.