|Authors: ||W. Adiyoga, H. de Putter|
|Keywords: ||economics, vegetable, lowlands, farm records, yield risk, price risk|
The study was aiming at examining the economics of vegetable production of ten farmers in the lowlands of Cirebon, West Java, Indonesia.
Farm records that documented the farmers materials and labor and the costs and income of vegetable crops grown from July 2013 to September 2015 were collected.
In total, 65 vegetable crop records were collected i.e., bitter gourd (1), hot pepper (1), rice (3), shallot (33), sweet corn (23), spinach (2), and yard long bean (2). Farm-record results show that the farm/firm-base profits range from -37,000 to 506,000 IDR. Referring to the legal minimum wage, it implies that each farm/firm should provide at least 50,000 IDR
day-1. This implies that five out of ten farmers/households have incomes lower than the local legal minimum wage.
This may also imply that within two years of cultivating vegetables, half of the farmers participating in the farm-record activity frequently experienced a loss.
The two most uncertain factors affecting farmers' income are production (yield) and marketing (price) risks.
It is suggested that farmers may forego an enterprise that has a high potential for income but also carries a high risk for loss, and instead choose an enterprise which is less profitable but also less risky.
For example, instead of growing shallot 3-4 times in a row, farmers may use sweet corn as a rotation crop.
The possible solution for overcoming marketing risks is through developing institutional arrangements, such as collective marketing or contract farming that may strengthen farm-market linkages.
An alternative recommended option is to continuously encourage farmers to do their own farm-records so that they will have more information for planning and managing risks in their next farm business activity.
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