Transaction Cost for Marketing of Voor Oogst Kasturi Tobacco: Case in Jember Regency

DOI

10.2991/absr.k.220101.050How to use a DOI?

Keywords

Tobacco marketing; Transaction cost; Searching cost; Negotiation cost; Monitoring cost

Abstract

The tobacco marketing institution has strategic roles (entry point) in driving tobacco agribusiness system and improving farmers’ bargaining position. However, the limited information owned by the farmer in marketing the tobacco causes not all farmers to directly sell the tobacco to the warehouse, even if the farmer faces fluctuating prices and uncertainty of needs. It resulted in an additional cost called transaction cost. This study aims to analyze the transaction cost and factors influencing farmers’ transaction cost in marketing the tobacco in one of the centers of Voor Oogst Kasturi tobacco in Kalisat Sub-district, Jember District. The data were collected through interviews with 100 farmer respondents. Transaction cost was computed using an accounting approach and its factors were evaluated using regression method. The results showed that total seasonal transaction costs paid by farmers who do not partner with warehouses is higher than farmers who partner with warehouses. Total seasonally transaction costs paid by farmer who not partner with warehouse is Rp 3,413.88/kg, consisted of searching cost (Rp 28.33/kg or 0.83%), negotiation cost (Rp 9.55/Kg or 0.28%), and contract implementation (Rp 3,375.64/kg or 98.88%). Total seasonally transaction costs paid by farmer who partner with warehouse is Rp 1.669.07/kg consisted of searching cost (Rp 30.31/kg or 1.82%), negotiation cost (Rp 44.06/kg or 2.64%), enforcement cost (Rp 7.01/kg or 0.42%), monitoring cost (Rp 1,267.15/kg or 75.92%) and transportation cost (Rp 320.46/kg or 19.20%). Meanwhile, factors significantly influence the transaction cost in marketing voor oogst kasturi tobacco is amount of tobacco, frequency of accessing marketing institution, activeness in searching for information, and marketing system. The recommendation of the research is selling tobacco to warehouse through partnerships or selling tobacco in higher volume can reduce transaction cost and increase farmer’s income. Meanwhile, the government must support institutions such as APTI to be more active in protecting the farmer’s rights, especially the price and quality of tobacco.

Copyright

© 2022 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article under the CC BY-NC license.

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TY  - CONF
AU  - Wilda A. Safitri
AU  - M. Rondhi
AU  - Triana D. Hapsari
PY  - 2022
DA  - 2022/01/05
TI  - Transaction Cost for Marketing of Voor Oogst Kasturi Tobacco: Case in Jember Regency
BT  - Proceedings of the 6th International Conference of Food, Agriculture, and Natural Resource (IC-FANRES 2021)
PB  - Atlantis Press
SP  - 366
EP  - 373
SN  - 2468-5747
UR  - https://doi.org/10.2991/absr.k.220101.050
DO  - 10.2991/absr.k.220101.050
ID  - Safitri2022
ER  -