Analysis of Income and Transaction Costs of Purchasing Farmer’s Sugarcane at Wonolangan Sugar Factory, Probolinggo Regency, East Java

Abstract

Sugarcane is the main raw material for making sugar in Indonesia. Wonolangan Sugar Factory is one of the sugar processing factories located in Probolinggo Regency. PG (Pabrik Gula) Wonolangan Sugar Factory as buys sugarcane using Weight Sugarcane Buying System (SPT-ST) and a Potential system (SPT-SP). The difference in the sugarcane purchasing system is expected to provide different income to farmers, therefore the purpose of this study is to determine the income level of farmers in the SPT-ST and SPT-SP system; fine out the cost of economic transactions in the SPT-ST and SPT-SP system. This research method uses analytical methods with transaction cost analysis and independent t-test analysis, as well as quantitative methods with income analysis. The results showed: (1) Average income of farmers in the SPT-ST is Rp. 32,810,020.87/Ha, and Rp. 30,625,224.50/Ha for farmers with the SPT-SP sales system; (2) The transaction costs for farmers in the sugarcane buying system (SPT-ST) are Rp. 271,310/season and Rp. 679,583/season for SPT-SP farmers. The proportion of transaction costs to the income of SPT-SP farmers is 2.3%, while for SPT-ST farmers it is 0.8%. The proportion of transaction costs to the total costs incurred by SPT-ST farmers was 0.7%, for SPT- SP farmers it was 1.7%; (3) There is no significant difference between the average income of farmers with the SPT-ST and SPT-SP sales system in the PG Wonolangan. The difference in the average income is Rp. 2,157,776.06/Ha.