Risk preference and choice of sugarcane planting method: are risk-taker farmers more likely to choose bud chip methods?

Abstract

An effort to increase the productivity of sugarcane is by using the method of bud chips. Bud chip method has proven to improve the productivity of sugarcane and produce more cost-efficient, but still a few farmers who use it. This is due to higher production risk, and sugarcane farmers are still not technically skilled. This research aims to analyze the magnitude of the risk of sugar cane production with bud chip and conventional method and to know the characteristics of sugar cane farmers with bud chip and conventional method in facing production risk. The research was conducted in the working area of PTPN X company (Kediri Regency, East Java Province, Indonesia). The sample was taken incidentally by selecting 60 sugarcane farmers (20 farmers sugarcane with the bud chip method and 40 sugarcane farmers with the conventional method). The results showed that sugar cane farmers with the bud chip method have a higher risk of production than conventional methods; beside that, sugar cane farmers with bud chip method classified as a risk-taker and sugar cane farmers with conventional methods were risk averters. Intensive training and assistance from the sugar factory are needed to improve the application of bud chips at PTPN X company.