Efficiency and Trading Channel System of Smallholder Sugarcane Farmers in Situbondo Regency

Abstract

Sugarcane is one of the 15 national main commodities to support plantation development goals from 2010 to 2014. The purpose of this study are to identify the marketing channel, function, institution, market structure and market behavior, and to analyze the operational efficiency of trading sugarcane system with margin trading system approach, the farmer's share, and the ratio of benefit to cost. Observation and interview were performed with the purposive method for smallholder’s sugarcane farmers in the Situbondo Regency, while the snowball method was performed for institution trading system. The result showed that there were four trading channels system. Based on margin trading system, the farmer's share, and the ratio of benefit to cost trading system shows that the channel fourth is the efficient channel to direct sales from farmers to sugar factory.