International Journal of Civil Engineering and Technology (IJCIET) Volume 10, Issue 06, June 2019, pp. 364-374, Article ID: IJCIET_10_06_035 Available online at http://iaeme.com/Home/issue/IJCIET?Volume=10&Issue=6 ISSN Print: 0976-6308 and ISSN Online: 0976-6316
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ANALYSIS OF MARKET STRUCTURE, CONDUCT AND PERFORMANCE OF CORN (ZEA MAYS L.) IN KEDUNG MALANG VILLAGE, PAPAR DISTRICT, KEDIRI REGENCY, EAST JAVA
Abdul Wahib Muhaimin Socio-Economic Agriculture Departement Faculty of Agriculture, Universitas Brawijaya Malang, 65145, Indonesia
Lis M Yapanto Socio-Economic Departement Faculty of Fishery Universitas Negeri Gorontalo 96128, Indonesia
Verina Wijayanti Socio-Economic Agriculture Departement Faculty of Agriculture, Universitas Brawijaya Malang, 65145, Indonesia
ABSTRACT The corn marketing system in Kedung Malang Village, Papar District, and Kediri Regency involves several marketing agencies. The involvement of marketing agencies causes corn prices at the farm level to differ from the price of corn paid by consumers. This study aims to analyse (1) market structure, (2) market conduct and (3) market performance on the marketing of corn in Kedung Malang Village, Papar District, and Kediri Regency East Java. This research was conducted in Kedung Malang Village, Papar District, and Kediri Regency in November-December 2018 with 32 farmer respondents and 2 marketing agency respondents. The results of the study show that the market structure leads towards perfect competition. Market conduct is seen from the system of formation and pricing between merchants, where the most dominant marketing agencies village are collectors in Determining purchase prices. Furthermore, from market performance calculated from the analysis of price efficiency, marketing in Kedung Malang Village is efficient. However, from the analysis of the operational efficiency of marketing in Kedung Malang Village, it has not been efficient because the value of R / C is less than 1.
\http://iaeme.com/Home/journal/IJCIET 364 [email protected] Abdul Wahib Muhaimin, Lis M Yapanto and Verina Wijayanti
Maize marketing system in Kedung Malang, Papar Subdistrict, Kediri involves several marketing agencies. Thus, with the involvement of marketing institutions, the price of corn at the farm level differs from the maize prices paid by consumers. This study aims to analyse (1) the structure of the market, (2) the behaviour of the market, and (3) the performance of the market in maize marketing in Kedung Malang, Papar Subdistrict, Kediri. The research was conducted in Kedung Malang, Papar Subdistrict, Kediri from November-December 2018 with the 32 peasant farmer respondents and 2 respondents from marketing agencies. The study shows that the structure of the market leads towards perfect competition. Market behaviour seen from the system and the establishment of inter-dealer pricing where the most dominant marketing agency is collecting village in determining the purchase price. Moreover, the performance of the market is calculated from the analysis of the efficiency of pricing; marketing in Kedung Malang has been efficient. However, analysis of the operational efficiency of marketing in Kedung Malang has proven inefficient because the value of R / C is less than one. Keywords: Market Structure, Market Conduct, Market Performance Cite this Article: Abdul Wahib Muhaimin, Lis M Yapanto and Verina Wijayanti, Analysis of Market Structure, Conduct and Performance of Corn (Zea Mays L.) In Kedung Malang Village, Papar District, Kediri Regency, East Java. International Journal of Civil Engineering and Technology, 10(06), 2019, pp. 364-374 http://iaeme.com/Home/issue/IJCIET?Volume=10&Issue=6
1. PRELIMINARY Corn holds an important position after rice for maize, as one of the staple foods in Indonesia. Corn reached 29 million tons in 2015 and is expected to increase by 3.5 million tonnes in 2020 (Agency for Agricultural Research and Development, 2015). Corn produced is used to meet some of the needs for household consumption, industrial non-food needs and the needs of feed directly. Corn production centers are spread across 12 provinces and 45 counties. In East Java, which became the center of maize, namely Tuban, Malang, Kediri and Blitar (East Java Communications and Information Technology, 2015). Kediri, one of the centers of maize production in East Java, has the potential to meet the needs of the market. The potential is evident from the amount of corn produced. Maize production in Kediri in 2015 reached 3,242,616 quintals / year and in 2016, reached 3,229,301 quintals / year (CBS, 2017). Districts that have a large contribution as a supplier of corn are in Kediri District of Papar. Maize production is generated by 289 881 quintals / year in 2016 (CBS, 2017). The high yield produced by a corn farmer in the village of Malang Kedung did not ensure that farmers' income is also high. This is because the income of farmers is also influenced by the prevailing price in the market. The prevailing market price of maize in Kedung Malang is based on the purchase price of PT Kediri Matahari Corn Mills and influenced by the involvement of marketing agencies. Maize marketing system in Kedung Malang, Papar Subdistrict, Kediri involves several marketing agencies, as well as penebas gatherer village. Marketing agencies are engaged because of the limitations of the farmers in accessing consumers and performing marketing functions that can facilitate the delivery of products from producers to consumers. This makes the marketing agency instrumental to distribute corn from producers to consumers. Therefore, with the involvement of marketing institutions, the price of corn at the farm level differs from maize prices paid by consumers. The sale price of corn in Kediri at the farm level on 11
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November 2018 is US $5,050 and the price of corn at the collector level is Rp 5,500 (Setiawan, 2018). The high price difference shows that a high marketing margin and an indicator of the share price are not balanced between the farmers and various other marketing agencies; this shows that the marketing of maize was not efficient. According Soekartawi (1993), an analytical tool that can be used to determine whether the marketing of a product is efficient or not is SCP (Structure, Conduct, Performance). (Structure) market will dictate how businesses behave (conduct) that ultimately determines the (performance) of the market (Winsih, 2007). This study aims to analyse (1) the structure of the market, (2) the behaviour of the market and (3) the performance of the market in maize marketing in Kedung Malang, Papar Subdistrict, Kediri.
2. RESEARCH METHODS Research was conducted in Kedung Malang, Papar Subdistrict, Kediri in November-December 2018. The choice of location research was based on the consideration that Kedung Malang is one village in the district of corn production centers Papar, Kediri. Respondents for corn farmers were generated using the simple random sampling method; the samples were taken from namely 20% of all maize farmers in Kedung Malang to obtain the total sample of 32 respondents. This is in accordance with the opinion of the Gay and Diehl (1992), where the sample size of a descriptive study is minimum of 10% of the population. While the respondents’ determination is done with a maize marketing agency, the snowboll sampling method follows the flow of maize marketing is in progress. Samples marketing agency comprised of one village trader and 1 penebas obtained from the searches that followed the marketing channels based on information from a sample of farmers.
2.1. Market Structure Analysis The market structure according to Sudiyono (2002) is a market characteristic that describes the number and magnitude of the seller and the buyer, the state of the products traded, ease out of the market and knowledge of the pricing information. Analysis of market structure on the marketing of maize in Kedung Malang, Papar Subdistrict, Kediri in the research is done by looking at the characteristics of the corn market Kedung contained in Malang, Papar Subdistrict, Kediri. The characteristics that serve as the basis for determining the structure of the market according to Anindita (2004) are: (1) The level of product differentiation, (2) Power setting prices, (3) Barriers in and out of the market and (4) Competition beyond price.
2.2. Analysis of Market Behaviour Market behaviour by Asmarantaka (2012) is the behaviour of buyers and sellers, strategy or reaction of buyers and sellers individually or in groups in competitive relations or negotiations with other buyers and sellers to achieve the marketing objectives of a market. Analysis of market behaviour on the marketing of maize in Kedung Malang, Papar Subdistrict, Kediri in this research is done by looking at the system and the establishment of inter-dealer pricing.
2.3. Market Performance Analysis According Anindita (2004), the performance of the market is an assessment of the economic resources, namely to what extent the actions or behaviour in the industry in the market contributed to the best that can be achieved in accordance with the purpose of the relevant social and economic communities. Analysis of market performance in the maize marketing in
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Kedung Malang, Papar Subdistrict, Kediri in this research is carried out by calculating (1) the efficiency of price and (2) operational efficiency. Analysis of price efficiency by Anindita (2004) can be analysed using two approaches, namely:
2.3.1. Transportation costs (Transportasion cost) Hi - H (i-1) = BT Where: Hi : The price in the village H (i-1) : Price in other villages BT : Transportation costs Price efficiency criteria according to the transport function for marketing agencies, namely: Hi - H (i-1) > BT, the efficiency achieved Hi - H (i-1) 2.3.2. Selling Price Difference between Institutions HJ1 - HJ (i-1) = BPi Where: HJi : The selling price of the i-marketing agency HJ (i-1) : The selling price of marketing agencies to (i-1) BPi : The cost of implementing the marketing functions to the institution-i Which consists of the cost of packing, loading and unloading, sorting And grading and packaging. i : 1, 2, 3, ... n, is a marketing agency that is involved. Price efficiency criteria for marketing agencies: HJi - HJ (i-1)> BPi, then efficiency achieved HJi - HJ (i-1) 2.3.3. Marketing Margin Analysis MP = BP + K or MP = Pr-Pf Where: MP : Marketing Margin BP : Marketing Costs K : Advantage Marketing pr : Consumer Price Level pf : Price at Farmer 2.3.4. Farmer's Share 푃푓 퐹푆 = 푥100% 푃푟 http://iaeme.com/Home/journal/IJCIET 367 [email protected] Analysis of Market Structure, Conduct and Performance of Corn (Zea Mays L.) In Kedung Malang Village, Papar District, Kediri Regency, East Java 2.3.5. Ratio of Profits and Costs 푃푟표푓푖푡푠 푅푎푡푖표 = 퐶표푠푡푠 Where: Ratio> 1, then there is profit or it’s efficient Ratio = 1, then the BEP or not efficient The ratio of <1, then there is loss or it’s inefficient 3. RESULTS AND DISCUSSION 3.1. Market structure Based on the results of research using simple random sampling method to find the respondent farmers and snowball sampling method for finding marketing agency respondents, we gained some institutions involved in the marketing of maize in the area of research. The agency namely farmers, rural collector, and penebas. Marketing channels in Kedung Malang, Papar Subdistrict, Kediri presented in figure 1. Picture 1. Regional Marketing Channels Research In the study area, most residents work in agriculture, so that the number of farmers as producers are more than the traders who make a purchase of maize. The research results of the characteristics of the corn market Kedung contained in Malang, Papar Subdistrict, Kediri are presented in Table 1. Table 1. The characteristics of the Corn Market in the Regional Research The characteristics of No. Farmer Gatherer village Penebas the Market Level of Product 1. Homogeneous Homogeneous Homogeneous Differentiation As the price maker and 2. Pricing power There is none has a relatively small There is none market power. Barriers to Market 3. Quite easy Very easy Quite easy Entry Exit Competition in the 4. There is none There is none There is none Outer Price The survey results revealed that more and more farmers sell their crops to the village, collecting as many as 30 farmers (93.75%). Farmers who sell their crops to the village collector, sell corn products in dry form pipil and packed with sacks. Then by collecting in the village, pipil dried corn products were sold to the livestock and food industry entrepreneurs inside and http://iaeme.com/Home/journal/IJCIET 368 [email protected] Abdul Wahib Muhaimin, Lis M Yapanto and Verina Wijayanti outside Kediri. Usually, consumers subscribed to village collectors are pig entrepreneurs in Blitar, employers in Nganjuk poultry, snack food industry companies and forage PT Kediri Matahari Corn Mills in Kediri, as well as animal feed company PT Charoen Pokphand Tbk in Krian. While as many as two farmers (6, Yields are ditebaskan, by penebas dipipil, dried,and packed with sacks. Once packaged, the crop yields are all brought to the village collector for sale. Yields of both farmers and village- level collector penebas by direct sale to consumers in need. Typically, consumers need to contact the village collector for negotiation regarding the price beforehand. If the final consumer and village collectors have agreed regarding the price and delivery mechanisms, the village will send corn gatherers requested by final consumers on a day that has been agreed. Below outlines the delivery mechanism applied by the village collector: 1. Submitted by truck gatherer village, but the cost of transport and unloading are borne by the final consumer. 2. End consumers to bring the truck to the home village collectors to load corn; only loading and unloading costs are borne by the final consumer. Based on Table 1 above, at the level of farmers, rural collectors and penebas, there is no product differentiation on maize marketed products, so that products are purchased by collectors, as well as those marketed village is homogeneous. At the farm level and penebas, there is no power to determine the price. Gatherer village has little power to set prices based on the price in the market of one of the biggest corn Kediri, PT Kediri Matahari Corn Mills. In the maize marketing activities, there is a barrier to entering the market. At the farm level, it faces obstacles, namely the limitations to market information so as to cause farmers to less freely enter the market. At the level of village collectors, no obstacles were faced to get into the market. At penebas level, the barrier is the unavailability of business facilities including storage sheds and corn pemipilan tool. There is no competition beyond the price at the farm level, the collector of the village, as well as penebas. Four features, indicating that the structure of the corn market is formed tends to perfect competition. The characteristics of the power, to determine the price at the level of village collectors and obstacles, out of the farm level and penebas, shows to characterise a monopolistic market. Four features, indicating that the structure of the corn market is formed tend to perfect competition. 3.2. Market behaviour Market behaviour is a pattern of market participants to affect or adjust in the marketplace. Market behaviour can be seen by looking at the system and the establishment of inter-dealer pricing. The purchase price is determined by the village collector by referring to one of the largest corn companies in Kediri, PT Kediri Matahari Corn Mills. Farmers and penebas do not have bargaining power and information related to prices, so farmers and penebas just as a price taker and cannot determine the selling price of the products it sells. 3.3. Market performance Performance of the market is used to see how far the market structure and market behaviour is when marketing a commodity. The performance of the market in maize marketing in this study, was analysed by calculating the price efficiency and operational efficiency. 3.4. Efficiency Price Efficiency prices shows the relationship between cost and output. Efficient marketing will be achieved when the entire market system prices reflect the costs that occur all the time, space, http://iaeme.com/Home/journal/IJCIET 369 [email protected] Analysis of Market Structure, Conduct and Performance of Corn (Zea Mays L.) In Kedung Malang Village, Papar District, Kediri Regency, East Java shape, namely the cost of storage and transport costs. Price efficiency is calculated from the cost of transportation and the difference in selling price between agencies. 3.4.1. Transportation costs In the marketing channel 1, the price of the one village a farm gate price in Kedung Malang, Papar Subdistrict, Kediri. While the price of the other villages are in the farm gate price Wonokerto village, District Plemahan, Kediri. Wonokerto village election as another village due Wonokerto village directly adjacent to Kedung Malang and gatherer village has similar characteristics to the village collector Kedung Malang. Below is a table of the calculation of the cost of transportation: Table 2. Calculation of Transportation Costs Marketing Channels 1 Marketing Channels 2 Information Price (USD) Information Price (USD) Prices in Kedung Prices in Kedung Malang 5,300 5,350 Malang Prices in the village Prices in the village of 5,250 5,300 Wonokerto billowing Price gap 50 Price gap 50 Transportation costs 25 Transportation costs 25 Sources: Primary data is processed, 2019 From table 2, the results of the calculation of transportation costs indicates that the difference in price between Kedung Malang Wonokerto village outweighs transportation costs. This means marketing efficiency is achieved. On the marketing channel 2, the price on the price at the level of villages are penebas in Kedung Malang, Papar Subdistrict, Kediri for collectors get dry corn pipil of penebas. While the price at the other village is the price level in the village penebas billowing, Papar Subdistrict, Kediri. The village election billowing as another village because the village billowing directly adjacent to Kedung Malang and penebas have similar characteristics Kedung penebas in Malang. From table 2, the results of the calculation of transportation costs indicates that the difference in price between Kedung Malang with billowing Village is greater than the cost of transportation incurred. This means marketing efficiency is achieved. 3.4.2. Selling Price Difference between Institutions Difference between institutions’ selling price is calculated from the selling price of the i-th marketing agencies’ selling price, reduced by the marketing agency to (i-1) is greater than the cost of marketing in order to achieve efficiency. Here is a table of the calculation of the difference in selling price between agencies. Table 3. Calculation of Selling Price Difference between Institutions on Marketing Channel 1 Information Price (USD) Information Selling prices in Level Gatherer 5,600 Difference Selling price at Farmer 5,300 Price> Price gap 300 Marketing Costs Marketing costs 230 Sources: Primary data is processed, 2019 http://iaeme.com/Home/journal/IJCIET 370 [email protected] Abdul Wahib Muhaimin, Lis M Yapanto and Verina Wijayanti From Table 3, the results of the calculation of the difference in selling price between agencies shows that the difference in price is greater than the cost of marketing. This means marketing efficiency is achieved. The following is a table of calculation of the difference in selling price between institutions on the marketing channel 2. Table 4. Calculation of Selling Price Difference between Institutions on Marketing Channel 2 Information Price (USD) Information Selling prices in Gatherer Level 5,700 Selling prices in Penebas Level 5,350 Difference Selling price at Farmer 4,950 Price> Price gap 750 Marketing Costs Marketing costs 504 Sources: Primary data is processed, 2019 From Table 4, the results of the calculation of the difference between the selling price between agencies shows that the difference in price is greater than the cost of marketing. This means marketing efficiency is achieved. Based on the calculation above price efficiency, marketing can be said to be efficient because the average costs are still relatively small compared to the price difference earned by each marketing agency. This means that farmers have been able to allocate the costs incurred to produce the maximum output; penebas and village collectors can also allocate inputs obtained efficiently. For farmers who sometimes have not been able to restore all the money borrowed from the crops produced, the results of the interview due to borrowed capital are not only used for farming only, but also used for the needs of everyday peasant life. 3.5. Operational efficiency Operational efficiencies associated with the implementation of marketing activities could increase or maximise marketing input-output ratio. The analysis conducted in this research is the analysis of marketing margins, the farmer's shareand the ratio of benefits and costs. The results of the operational efficiency of marketing margin approach, the farmer's share and the ratio of benefits and costs are summarised into a single table in Table 5. Table 5. Operational Efficiency Analysis Marketing channel Marketing Agencies Margin (USD) FS (%) R / C 1 farmer - 94.64 gatherer village 300 - 0.3 2 farmer 86.84 penebas 400 - 0.46 gatherer village 350 - 0.52 Sources: Primary data is processed, 2019 Based on the three operational efficiency calculations above, the marketing channel 1 is a marketing channel that has the smallest margin and the highest farmer's share, but the value of the ratio of benefits and costs of less than 1 indicates that there has been an efficient marketing channel. The marketing channel 2 has a margin greater than marketing channel 1 and has a farmer's share lower than the value of the farmer's share of marketing channels 1; the v value of the ratio of benefits and costs of the entire marketing agency is less than 1, which indicates http://iaeme.com/Home/journal/IJCIET 371 [email protected] Analysis of Market Structure, Conduct and Performance of Corn (Zea Mays L.) In Kedung Malang Village, Papar District, Kediri Regency, East Java that the channel marketing this is also not efficient. From interviews with village collectors and penebas, R / C is small due to the large number of corn in the market (harvest), so consumers (employers livestock and food industries) can easily search for maize in other merchants that provide lower prices than that offered by the village collector in Kedung Malang. To avoid this, the collector villages provide competitive prices according to the market price of good quality so that consumers are not looking for other traders. This is why the village collector cannot get high profits. 4. CONCLUSIONS AND RECOMMENDATIONS 4.1. Conclusion Based on the results of research and discussion, the conclusion that can be drawn from the study analyses the marketing efficiency of corn in Kedung Malang, Papar Subdistrict, Kediri as follows: 1. Corn market structure contained in Kedung Malang, Papar Subdistrict, Kediri leads toward a perfectly competitive market. It can be seen from the characteristics of a perfectly competitive market that has a homogeneous product; there is no power to determine the price at the farm gate and penebas, as well as barriers and out of the market quite easily, and the absence of competition beyond price. 2. Market behaviour seen from the system and the establishment of inter-dealer pricing was the most dominant marketing agency is collecting village in determining the purchase price in Kedung Malang, Papar Subdistrict, Kediri. 3. The analysis of market performance using price efficiency analysis approach to transport costs and selling price difference between institutions, showed that efficiency has been achieved. This is because the average costs are still relatively small compared to the price difference earned by each marketing gencyca. Therefore, farmers have been able to allocate the costs incurred to produce the maximum output; penebas and village collectors can also allocate inputs obtained efficiently. However, based on the analysis of operational efficiency with the approach of the marketing margin, the farmer's share,and the ratio of benefits and costs showed that the marketing channel 1 has the smallest margin and the farmer's share is high; however, the ratio of benefits and costs of less than 1 indicates that there has been an efficient marketing channel. The marketing channel 2 has a margin greater than marketing channel 1 with a farmer's share lower than the value of the one in marketing channels 1. The value of the ratio of benefits and costs of the entire marketing agency that is less than 1 indicates that the channel marketing is also not efficient. 4.2. Suggestion Market performance seen from the analysis of operational efficiency is still not efficient. To improve the efficiency of the marketing of corn, farmers can choose one marketing channel due to lower margins formed and where share price received by farmers is higher. This is due to the marketing channel 1, just past the intermediary institution that is only the gatherer village. Gatherer village is expected to minimise future risk costs and losses incurred for marketing. Penebas’ future is also expected to minimise the cost pemipilan and packaging costs incurred for marketing. Peminimalisiran charge is intended that the gains can be higher than the costs incurred. Ultimately, the efficiency of the marketing approach operational efficiency can be achieved. http://iaeme.com/Home/journal/IJCIET 372 [email protected] Abdul Wahib Muhaimin, Lis M Yapanto and Verina Wijayanti REFERENCES [1] Anindita, Ratya. (2004). Marketing of Agricultural Products. Papyrus: Surabaya. [2] Asmarantaka. (2012). Agribusiness Marketing (Agrimarketing). Institut Pertanian Bogor Bogor. [3] Balitbang. 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