Farmers' Terms of Trade: Rice and Oil Palm Households in Kutai Kartanegara
DOI:
https://doi.org/10.18343/jipi.31.4.763Keywords:
farmers, household, oil palm, rice, welfareAbstract
This study analyzes Farmers’ Terms of Trade (FTT) among rice and oil palm farmer households in Kutai Kartanegara Regency using a household-level approach. Specifically, it examines the structure and magnitude of the index of prices received by farmers (IT) and the index of prices paid by farmers (IB) as the main components of FTT. A quantitative survey was conducted among 165 farmer households, consisting of 105 rice-farming households and 60 oil palm smallholder households. FTT was calculated as the ratio of IT to IB, while the Laspeyres index was applied to measure changes in price components relative to the base year. The results show that the FTT of rice farmers varied across districts, ranging from 84.15 to 107.98, with an average of 99.33. This indicates that rice farmers generally experienced a near-equilibrium welfare condition, although several households remained vulnerable to production cost increases and output price fluctuations. In contrast, the FTT of oil palm farmers ranged from 82.49 to 115.47, with a higher average of 103.23, reflecting relatively stronger purchasing power despite inter-district disparities. These findings highlight income disparities between farmer groups and emphasize the need for policies that stabilize farm output prices, reduce production cost burdens, and strengthen farmer institutions to improve household welfare.
Keywords: farmers, household, oil palm, rice, welfare
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