The Institutional Arrangement Amongst Agents of Besuki Na-Oogst Tobacco in Jember Regency Indonesia

Abstract

The successfully cultivation of Besuki Na-Oogst tobacco as the qualified exported product is determined by good cultivation technique and the institutional arrangement existing among the business actor as well as the policy maker, in this case the government. The important agents in the cultivation of Besuki Na-Oogst tobacco are farmers with their farmers group or farmers’ association, wholesaler, exporters with its exporters’ Association, government and overseas buyers. The research aims at investigating the institutional arrangement and partnership reinforcement amongst the business actors in cultivating Besuki Na-Oogst tobacco. The samples are selected by purposive sampling technique with Na-Oogst tobacco farmers as the respondents, exporters and government. The study applies the analysis using Analytical Hierarchy Process (AHP) and game theory. The findings indicate that the strategy to strengthen the commitment and solving the problem by agreement become the optimized strategy in the institutional relation amongst the business actor in cultivating Besuki Na-Oogst tobacco in Jember regency. The action executed by the farmers and exporters to achieve their optimized strategy of best response to achieve success in their partnership is to be strict to their commitment. The focal point or the agreement related to partnership success is achieved by keeping their commitment as desired by both farmers and exporters.