Role of Farmers in Agribusiness

Role of Farmers in Agribusiness – For some farmers agribusiness is still an alien term, while farmers themselves are actually part of the system of agribusiness, farmers and their farm was in the primary sector. This is in line with the opinion of David Downey and Steven P. Erickson, an expert in agricultural economics from the United States, which divided into five sectors of agribusiness, namely:
  1. Input sector (input supply sectors), which include fertilizers, seeds, insecticides, fuel, machinery and other equipment.
  2. Primary sector (farm production sectors), is central to the agribusiness, including farmers, ranchers and fishermen.
  3. Secondary sector (output sectors), a role change raw materials into finished material (agro).
  4. Tertiary sector (market farm products), serves to deliver products of primary and secondary sectors into the hands of consumers.

Of the four sehtor in agribusiness systems, it appears clear that the position of farmers is very strategic, but why just the ability to offer value-added is relatively low and most small business.

Participation and contribution of farmers against agribusiness is huge, especially for food commodities. Weak position mainly due to the selection of a small capital, low technology use, ownership of land is narrow, the products are perishable, the threat of climate such as floods and droughts, pests and plant diseases, as well as access to a very small effect on sumberdana and information. All of it is a common feature of most farmers in developing countries, including in Indonesia.

In the chain of agribusiness highest risk borne by farmers, would not be surprised if it touches the banks to strengthen capital so small farmers. However banks tend to seek business partners who are not at high risk, with demikina input sector, secondary and tertiary (means of production, agro-industry and marketing) almost always get priority lending.

Not many banks are willing and able to cooperate with the primary sector, with the exception of large-scale efforts such as state-owned or privately owned plantations nationwide. Disbursement of bank credit to farmers is in the form of droplets, and even then with the weight requirements.

Most farmers access to sources of funds is very small, how credit management procedures are not yet completely understood. Often the farmers fell into the clutches of the dark and pengijon bank.

Thus it is proper investment loans to small-scale farmers are able to reach most small businesses. To reduce risk, the banks should not only play a role in lending per se, but also acts as an information center agribusiness, most can not provide recommendations regarding the prospects of a viable commodity farmers cultivated.

For larger farms, banks can act as a management conselling agro, agro management assistance, agro development projects, and agro management control. Some banks have run the function. Ideally, measures were developed with a wider range. Some programs that ever existed such as the nucleus of the people (PIR) should be able to reach the essence of the interests of farmers.

Farmers’ access to information is very low, if any field extension, rural broadcasts (RRI-TVRI), enter the village newspaper, and other information sources, but the tendency of farmers to shackled with a commodity is still very strong.

The fact most of the farming business is run not so oriented to profit, just trying to survive and avoid starvation. According to M. Dawam Rahardjo (1992), food production has indeed been increasing nominal incomes of farmers, but it turned out to potential income received by farmers is pressed from two directions, namely:

1. Of the cost of production, in which to improve the physical production, farmers must pay a higher fee in order to buy fertilizer and pesticides. Although the acceptance of farmers increased, but should be reduced by higher production costs.

2. Of the sale price, farmers may also receive a “subsidy” price, because Buloq provide a floor price to protect farmers’ income. But it also serves to depress prices Bulog not to exceed the price ceiling, although it is done with the operation of the market, instead of setting the highest price

Farmers manufacturers actually do not fully enjoy the government’s food policy. No wonder if the profits from relatively small farmers, especially farmers with small land. Who gain most of it is rice traders, where according to M. Dawam Rahardjo “subsidy price of rice trader was finally accepted.”

Farm crops, plantations, horticulture, animal husbandry or fisheries, mostly by small farmers. Vast estates of the people can fold when compared with state-owned or private estates nationwide.

If a business unit of state-owned or private national number only hundreds or a thousand, then a business unit of small farmers can reach dozens of millions. It also complicate the realization of a harmonious business relationship with other agribusiness sectors, whether input, secondary or tertiary.

For bridging the various institutions such as cooperatives, NGOs, universities, expected more active role.

However the participation of farmers in agri-business must be balanced with the added value acquired. If the position of farmers in agribusiness gained, by itself increased the level of income and welfare.

If that happens, then the impact on the national economy would be positive, however, farmers constitute the majority of economic actors in Indonesia. If the purchasing power strengthens, then the industrial sector growth accelerated even more, because the reality of the largest consumer products industry is nothing but a farmer.

There were those who suggested that while the secondary sector of agribusiness, agroindustry that is displayed as a leading sector in development, one goal is for farmers’ added value increases.

To achieve this, the first condition of the peasants as a human resource (HR) agribusiness needs to be addressed, the introduction of agricultural science and technology worthy of grown-developed, and access to funding sources and Opera-continue to be improved. (Kompasiana)
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