Factors Affecting the Farmer's Choices of Marketing Institutions on Tobacco Farming in East Java

Abstract

Tobacco is one of the main plantation commodities in Indonesia. The income from the tobacco processing industry is a contributor to East Java's GRDP of 8.3% with a total production of 84,524 tons and a planting area of 100,658 hectares in 2019, this figure is greater than other provinces. However, compared to the previous year, the number of tobacco production decreased. This is due to the impact of La Nina which causes unfavorable conditions so that it has the potential to collapse, decreased planted area, decreased crop prices, inefficient farming systems, and lower prices. The phenomenon that occurs in Indonesia is that tobacco farmers experience several marketing difficulties, the weak position of farmers in the market who cannot participate in determining prices, price transparency and information between farmers and middlemen are one of the causes of the weak participation of farmers in tobacco marketing. The involvement of farmers in marketing their crops can be seen from the decisions taken by farmers in choosing marketing institutions. This study aims to determine (1) tobacco farming marketing institutions in East Java, (2) the factors that influence the selection of tobacco farming marketing institutions in East Java, (3) the influence of farmer participation in farmer groups on the choice of tobacco farming marketing institutions in Java. East. The method of determining the research location area is using the purposive method, namely East Java Province. The research method uses descriptive and analytical methods.The data collection method is secondary data through data in the 2014 plantation business household survey or SKB2014 by the 2013 Agricultural Sesus.The data analysis method used in the first problem formulation uses a qualitative descriptive method, while the second problem formulation uses binary logistic regression and the third uses a qualitative descriptive method. The results showed that: (1) Tobacco farming marketing institutions in East Java consisted of collectors and non-collectors (companies or industries, cooperatives, markets). Most of the tobacco farmers in East Java distribute their harvests to traders because of easy access, while the number of farmers who market to companies, cooperatives and markets is not high. (2) Variables that significantly influence farmers' choice of marketing institutions for tobacco farming in East Java are education, age, land area, farmer group members, and low price constraints, financing constraints. Some of the factors above indicate that farmers tend to choose non-collecting traders (companies, markets, cooperatives) based on education, age, land area, and members of farmer groups. (3) Farmer group membership will increase farmers' opportunities to market tobacco directly to other marketing institutions without going through collector traders. Based on these results, marketing institutions are very important to determine the welfare of farmers through prices, farmers should take part in the participation of farmer groups or other institutions to obtain clear information and price certainty, and be efficient in marketing their products.