Appendix A: Marketing Channels Für Rice

Appendix A: Marketing Channels für Rice

This appendix explains the marketing channels for rice mainly based on our observations through the Majalengka study (Chapter 4). As drawn in Figure A.I, rice mill plays a central role in the local marketing of rice. H mills paddies colleeted both from villuge colleetors und directly from farmers, and supplies milled ricc for loeal consumption via bazaar traders as weil as for transshipment to other regions. Rice marketing is similar to vegetable marketing in the aspect thatbazaar traders specialize largely in retailing to loeal consumers, but is different in the aspect that no agent like inter-village collectors of vegetables specializes in interregional trades. In addition to those private marketing channels, government channels are established for rice. When market priees go down below government support prices, rice mills seil their products to KUD (Village Unit Cooperative), which are collected in the local depots of BULOG (Food Logistic Board). Also, farmers are encourage

174 Appendix A 175

-- Private channel - - • Govemment channel

Other Region [

Consumers

lown r Markel ptace I (pa.ar) I -----f-----j I I Oazaar Iraders I :------~'T':)- -:-.::,

RieB"'" .",.. Farmers' group mill (kelompok ram)

•I 1 I Villago I collec1or I I Village

Paddy --+ (Horne consumplion) Farmer" Farm househotd

Fig/trI! A.I Marketing channels for riee Appendix B: Estimation of Credit Cüsts für Vegetable Producers under Alternative Credit Arrangements

This appendix explains the method and assumptions made for estimating the credit costs for vegetable producers in Majalengka under alternative credit arrangements (Table 4.6). Table A.I must be referred to while reading the following explanations: A producer who plants vegetables on 125 bala (0.175 ha) of farmland in the study village typically applies 300 kg of fertilizer and I litre of chemical (Table A.I, Column I). If the producer purchases some portion of these inputs from a village grocery (lI'l/rlil/g) in small lots, usually less than a bag (50 kg), his purchase price would be Rp 200/kg for urea and ZA (ammonium sulphate), Rp 21O/kg for TSP (tri pie superphosphate) and Rp 5000 for a boUle of Azodrin (monocrotophos) (Column 2). Thus, his total cost for the cash purchase is calculated to be Rp 70,500 (Column 3). If the producer buys the inputs on credit, he may have several alternatives; (a) collectors' trade credit, (b) purchase from fertilizer dealers on credit and (c) cash purchase from a fertilizer dealer by receiving loan from bank. The credit costs under these alternative credit arrangements are compared with the cost for cash purchase mentioned above.

COLLECTORS' TRADE CREDIT

Many vegetable producers in the study village receive fertilizer and chemieals from a collector at the early stage of planting and pay back when the vegetables are harvested, usually 2 months later. Under this arrangement, collectors charge typically Rp 200 for urea and ZA, Rp 215 for TSP and Rp 5000 for azodrin (Column 8), which is almost the same price charged by village groceries. Thus the producer's total payment is Rp 70,750 (Column 9) and which is only Rp 250 higher than that of cash purchase (Column 11). The difference between the cost of cash purchase (Column 3) and the payment to the collector (Column 7) implies his implied interest payment under this credit arrangement. Its monthly interest rate is calculated to be 0.18 per cent. However, it does not mean the collector receives only 0.18 per cent of interest payment. Since he can buy in a large lot from fertilizer dealers, his purchuse prices are much cheaper: Rp 182 for urea und ZA, Rp 207 for TSP and Rp 4400 for Azodrin (Column 4). If we assume that the collector buys 1.5 t of fertilizer and dozens of chemicals, and then charters a small truck, the transportation cost to the village would be Rp 4500, including loading and

176 Appendix B 177

TC/ble A.I Estimation of credit costs for vegetable producers under alternative credit arrangements, 1990 (Rp)

Fer/ilizer e"ell/iml ____• ______•• 0 ____ UreC/ TSP ZA AzocMII To/C/I

(I) Quantity (kg)" 150 50 100 2

Cash purehase: Farmer (in small 10ts)1> (2) Price (Rp/kg) 200 210 200 5000 (3) Cost (2) x (I) 30000 10500 20000 10000 70500

Collector (in large lots) (4) Price (Rp/kg) 182 207 182 4400 (5) Cost (4) x (I) 27300 10350 18200 8800 64650 (6) Tl'llnspol'tation costC 450 150 300 0 900 (7) Sum (5) + (6) 65550

Credit purchuse: A. Colleetors' trade credit (8) Price (Rp/kg) 200 215 200 5000 (9) Cost (8) x (I) 30000 10750 20000 10000 70750

(10) fmplied interest obtained by collector (9) - (7) 5200 fnterest rute (monthly): 3.89%

(11) fmplied interest paid by farmer (9) - (3) 250 fnterest rate (monthly): 0.18%

B. Ferlilizer dealers' sale on credil (12) f'rice (Rp/kg) 202 227 202 4500 (13) Cost (12) x (I) 30300 11350 20200 9000 70850 (14) Tl'llnsportation costd 1200 400 800 0 2400 (15) Sum (13)+(14) 73250 (16) Implied inlerest paid by farmer (15) -- (3) 2750 Inlerest rate (monlhly): 1.93% C. Bank 101111 (17) Pricc (Rp/kg) 182 207 182 4500 (18) eost (17)x(l) 27300 10350 18200 9000 64850 (19) Transportation eostd 1200 400 800 0 2400 (20) Dank loan eoste 8700 (21) Sum (18) + (19) +(20) 75950 (22) fmplied inlerest paid by farmer (21) - (3) 5200 Interest rate (monthly): 3.79%

Tahle A. J 1I0/es Oll folloll'i"g page 178 Appendix B

Tah/e A./ /lo/es

" Mcasurclllcnt unit of chcmical is bottlc ( = 0.5 litrc). h AsslImcs farmcr purchascs from a villagc groccry in small lots. e AsslImcs the portage of 1.5 t of load by small truck eosts Rp 4500. including loading/unloading. d Rp 1900 for 300 kg of load plus Rp 500 for a passenger by mini-bus. eInterest paYll1ent Rp 3300. duty stamp Rp 3000. eopy of ID cards Rp 60. transportation cost Rp 1500 and the cost for pictures of hushand and wife Rp 840 (Rp 1250/3 prints for eaeh). unloading costs, that is Rp 900 for 300 kg of fertilizer (Colull1n 6). Thus his cost for this credit arrangement is Rp 65,550 (Colul11n 7). As he receives repayment of Rp 70,750 from the producer, he can obtain the impHcit interest of Rp 5200, wh ich implies 3.89 per cent per month.

FERTILIZER DEALERS' SALE ON CREDIT

The farm producer can purchase the inpuls from fertilizer dealers in town on credit. The dealer charges Rp IO/kg monthly for the sales on credi!. If he pays back two months later, his purchase price is Rp 202 for urea and ZA, and Rp 227 for TSP (Column 12). Since the dealer does not seil chemicals on credit, he has 10 buy in cash and pays Rp 4500 for a bollle of Azodrin. His eost is Rp 70,850 (Column 13). ßesides this cosl he has to puy for transportation. The bus farc from Ihe village to Ihe dealer's shop is Rp 500 for his round trip .md additional Rp 1900 is required for carrying 300 kg of load. Thus his total cost is Rp 73,250 (Column 15) and his interest is Rp 2750 (Column 16), which implies 1.93 per cenl per 1110nlh.

BANK LOAN

Anolher possible alternative for the farm producer is to get a loan from a government bank, such as BRI (BlIllk Rakyal Illdollesia). and purchase all necessary inputs from the fertiHzer dealer in cash.Since he can purchase in cash. the price is Rp 20 lower than the credit buying case. namely Rp 182 for urea and ZA, Rp 207 for TSP and Rp 4500 for Azodrin. His payment is Rp 64,850 (Column 18). Although ßRI claims the monthly interest rate of only 1.5 per cent for a small loan. aclual inlerest rate amounts to 2.5 per cent, since I per cent of insurance premium is additionally charged. Applieants must submit several docllmenls, such as a copy of I D card. aland certificate for collateral. pictllres of the applicant al1<\ his wife. and an endorsed letter by the village head. In order to prepare these documents. an applicant must go to town at least twice. wh ich costs Rp 1500 for transportation and Rp 900 for the documents preparation. Moreover he has to pay Rp 3300 for revenue shunp irrespective the ulllount of his loan. If he borrows Rp 65.000. wh ich only covers the cost of Appendix B 179 ferlilizer lind chemiclIl, lind PIlYS blick all 111 the time of hllrvest (2 months IlIler), his 101l,1 cost of the blink 10lln is Rp 8700 (Column 20), wh ich includes Rp 3300 for inleresl payment to the bank lind Rp 5400 for other costs for IIpplication. Thus his total cost under Ihis arrangement is Rp 75,950 (Column 21), implying his interest pllyment of Rp 5200 (Column 22) or the interest rate of 3.79 per cent per month in this clIse. N otes and References

Pcasant Economy and Pcasant Marketing

I. The very low rates of market sale 01' peasants' produce are indieated in the studies of agrarian history in Europe. For example, Rlum (1978, p. 171) estimated that only about 15 percent of peasants in Fl'lInce in the late eighteenth centlll'Y ami 20 to 30 percent in Germany in the late early nineteenth eentury prodllced for sale ill the marke!. According to Chayanov (1986, p. 126), less than 10 percent (mostly Icss than 5 percent) of eommodities produeed by peasants in early twcntieth-century Russia were sold to markets, exeept industrial raw materials such as flax. 2. For the historieal role of plantations, see Hayami, Quisumbing ami Adriano (1990, pp. 9 12). 3. For more detail 01' eontroversies on the effects 01' eommereialization on peasants' community and welfare, sec Hayami (1989). 4. For a comprehensive treatment of eeonomic eonditions lInderlying the dominance of small-sized family farms, sec Hayami ami Otsuka (1993). 5. For a summary 01' Duteh colonial policies, sec Hayami and Kikuehi (1981, pp. 145 56). 6. This point was recognized by Geerlz (1963, p. 135) himsclf: 'In Japan, the peasanl sector supported the induslrial one during the crucial three decadcs 01' the latter's emergenee largely by llle,IIlS 01' eXlremely heavy land laxation ... the industrial sector, onec underway, lhen invigorated the peasant sector through the provision of cheap commercial fertilizer, more effective tools, support of technical education and extension work .... In Java most of invigorating effeet of the flourishing agro industrial sector was exercised upon Holland, and its impact upon the peasant sector was, we have seen, enervating.' 7. The same conclusion has been drawn from nUlllerous individual eommod ity studies, including Hirsch (1961) on sugar in India, RUllan (1969) on rice ami corn in the Philippines, Mears (1974) on rice in the Philippines, and Gregory Seoll (1985) on potato in Peru. For the survey of earlier lilerature, sec Abbott (1967). 8. Unlike a traditional view on interlinked transactions as an exploiting deviee in backward economies (Bhadlll'i, 1973; Deere and de Janvry, 1979), reeent theoretical developmcnts rccognizc their positive role of reducing transaction costs through 'economies of scope' (Bardhan, 1980; Braverman and Stiglitz, 1982; Bell, 1988; Hayami and Otsuka, 1993). Bell ami Srinivasan (1989) found that the interlinkage is more eommonly practised in advanced areas in India, such as Punjab, than in backward areas, such as Bihar. However, their analysis on the effect of the trade credit linkagc on marketed eommodity priees raises more questions than answers (Bell and Srinivasan, 1985). Arecent study of Siamwalla e/ al.

180 No/es ami Refe/'el1('es 181

(1990) on Thailand found no significant effect of this linkage on the inleresl rale, even Ihough their regression analysis is highly provisional. 9. On Ihe other hand, social benefil frOln BULOG's price slabilizalion operations may have 10 be deducted from the cost side, if it is significant as argued by Timmer (1990). 10. On the other hand, the development of labour-saving technology in agricultural product proccssing may rc(l!lee ineome and employmcnt for Ihc rural poor. For cxample, when a large number of small riee mills wilh rubbcr roller huskcrs ami jet polishers were established in I ndonesian villages in a dccade from the mid-1960s, possiblc loss in the cmployment of villagc women in hand pounding was of serious coneern (Collier, Colter, Sinahardi and Shaw, 1974). However, Timmer (1973, 1974) pointed out that the small riee mills had high labour-absorptive eapacity and that any wagc loss to farm households by reduction in hand pounding was more than eompensated for by inereased ineome resulting from bettcr riee recovery with the use of modern milling teehnology. 11. For the field survey proeedures and questionnaire forms, see Hayami ('I ul. (1987, 1989, 1991) and Kawagoc ('I al. (1990). 12. Similar to rice, BULOG tries to support the farm priees of corn and soybean at a noor through cooperatives but this operation is not frequent al1(l has but limited impacts. Much greater impacts on markets are exercised by BULOG through the manipulation or imports. For the ease of corn, sce Timmcr (1987, Chapters 8 and 10). For the case or soybean, see Section 2 in Chapter 2 or this volume. 2 A Prototype in lJpland Java

I. This chapter draws on Hayami ('I ul. (1987). Some or the materials were also published in Hayami el al. (1988a, 1988b). 2. For detail on tenancy contraets and their resomee alloeation implications, see Morooka ami Hayami (1989). 3. The incidence or this land-pawning eontract has also been reported in the Philippines (Hayami and Kikuchi, 1981, Chapters 4 and 5) and in . Thailand (Siamwalla el (/1., 1990). 4. Offieially unintended effects of government market intervention to promote the business of large traders at the expense of small traders are also reeorded for grains in Kenya (Jones, 1972, C1utpter 8) and potato in Peru (G. ScolI, 1985). For arecent literature on the effeets of government interventions in Afriea, see Lele and Christiansen (1989). 5. The houses or both village and inter-village colleetors are often called depol to the extent that farm commodities are assembled there for t ra nsshi pmen t. 6. In reality, not all lok os are loeated in the neighbourhood of the bazaar. Most ,okos engage in both loeal retailing and intelTegional transshipping aetivities. Some shops whieh are typically loeated in the outskirts or town and cngage mainly in commodity assembling and transshipping are also ca lied depot. 7. One exceptional ease was observed in which an inter-village collector received payment from a trader in Bandung a month or so in advanee or 182 The Ag,.a,.;an O,.;g;ns 0/ Comme,.ce anti Indu.vtry

cvcry harvcsting seIlson. from whieh he finnnced ndvance payments to hamlet collectors. 8. In the per-kilogram purchase harvested crop needs to be weighted at both the farm and the factory gates, whereus it is weighted only once at the factory gute in the leha.mll pllrchase. 9. For price differences corresponding to qllality differences. see Bottemu and Altemeier (1990).

3 The Scene of a Transmigration area in Sumatra

I. This chapter draws on Hayami el (11. (1987) and Kawagoe and Hayami (1989). 2. When the Gurut study wus conducted in August 1986, the wuge rates were Rp 1500 for mules and Rp 1300 for females in the Lampung Village. und Rp 1200 for males and Rp 600 for females in the Garnt Village. During the interim 18 months, inereases in the nominal wage rates in the order of about 30 percent were recorded for both study sites. Relatively higher wuge rates for female to male labour in thc Lampung than in the Garut Village may rencct greater scarcity of womcll in the Ilewly settled area. 3. Such a periodic bazaar in the village (or small town) is not uniquc in the trallsmigration area but also found in the areas in Java that are remote from major town bazaars. 4. Farm income per hectare from perennial plants is usually much higher than from CGPRT crops. Howevcr. it takes many years bcfore perennial plants bear fruil. In the casc of pepper, for example, farmers have to wait five years before they begin to harvest and the full yield capacity will not bc reached for seven ycars. A large initiul investment in seedlings, supports and fenccs, plus the opportunity cost of a perennial crop with delaycd yiclding. represents a severe limitation for farmers to convcrt arable fields into orchards. 5. Tempe and tofu produced in local towns ure mainly sold by processors themselves ut their own vending stalls in bazaurs, both in the Lumpung and the Gurut study areas. A difference exists in their marketing at the village level. In the Garut Village lempe produced within the village and lofil brought in from the town are sold in smnll grocery stores (1I'{//,uIIg). In the Lampung Villnge, lempe and lofu are not sold at lI'a/'llllg. but sold at thc village bazaar on Tuesday and Friday mornings. On the buzaar days processors in this village as weil as surrounding villuges und towns bring their products to seil ut vending stulls. In fuct. villuge processors usually produce lempe for sale on bazuar days only. For other days a vendor from town occasionally brings lofil for delivery to small open-stund restuumnts in villages.

4 Marketing Innovation for Commercialized Production

I. This chapter draws on Hayami el al. (1991) and some basic datn draw on Kawagoe el (11. (1990). No/es and References 183

2. Similar to the case of soybean in Garut and Lampung, vegetables in Majalengka approximate the casc of 'smalt country' in the terms of international economics. J. This informal wholesale market is ca lied •Pa.l'ar Ampera' after the name of this street. This is a purely informal market with no government authorization. Pa.\·(//· Ampera is the only wholesale market for vegetables in the Majalengka Distriet that is open daily, but similar markets opera te in certain days of a week either within 01' nearby bazaars in Illany other local towns. 4. 80th markcts receive trucks of vegetables and fruits from alt over the nation. The functions of these two markets, however, arc somewhat diffcrent. Pasar Induk is geared mainly for distribution to retailers in the city such as groceries (lI'arulIg), street vendors and pedlars. A rctail market operates in a block within Pasar Induk. On the other hand, Pa.wlr Cibitung is more 01' aredistribution centre of received vegetables for other retail bazaars. Therefore, buycrs in Pa.mr Cibitung are predominantly wholesalers who purehase vegetables from this wholesale market for distribution to retailers in retail markets. Unlike PaslI/' Induk, no retail block is attached to Pa.l'ar Cibitung. 5. Somc bazaar resalers, especiulty those specialized in chili und spices, appear to be ethnic Chinese. 6. If we deduct from this income the imputed labour cost (Rp 1530 = Rp 170 x 9 hours) and the imputed credit cost (Rp 130 = 0.65 x Rp 20,000), the net rcturn to the bazaar vendor's entrepreneurship is cstimatcd to bc Rp 1400 per day. Notc the intcrcst rate of 0.63 is based on KOSIPA's rate in Table 4.11. 7. Rotating credit association (ar;sall) is organized by some members of PKK, which may bc uscd as a possible source of working capital. See Kawagoc, Ohkama and 8agyo (1990) for detail. Glossary

Angkutan kota/dcsa Mini-bus, major public transportation in loeal towns and villages Arisan Rotating eredit association Bata Measure of land (I bata = 0.0014 ha) Bawon Harvest sharing system in whieh the harvesters' wages are paid in kind. Or harvesters' share itself Bceak Tricyc\e Bmuh tani Agricultural labourer Centeng Hazaar resaler Colt bak Mini (2-ton) truck with gasoline engine Delman Ponyeart Departmen Koperasi Department of Cooperatives Depot Village eolleetor's house, where farm produee is tempora rily gathered and transshipped Desa Village Gadai A pawning arrangement, utilizing farmland as a collateral Gaplek Dried cassava chips Gono (Japanese) Wealthy peasants Ijon System in wh ich standing crops are sold several months before harvest Kabupaten District Kampung Hamlet Keeamatan Sub-district Keeap Sweet soy source Kclompok tani Farmers' group Kios Roofed vending stall Kota Town Leunea Vegetable specific in West Java Maro Share-tenaney arrangement where both output and cost for fertilizers and chemicals are shared equally between land lord and tcnant Opak Chip made of cassa va for snack Palawija Upland crops such as soybean, corn and cassa va Pasar Hazaar or market place in Indonesia Pedagang keliling Pedlar Pedagang kaki lima Hazaar vendor Penabas Middleman who purchases farm produee by teha.mll ar rangements

184 Glossal'Y 185

Penampung A collector who usually lives in a village and collects farm prodllce in his village and the surrounding area for delivery to markets Pengepak Pellump/llIg Pingepit Small village collector who brings a few bags of farm produce by bicycle or motorcycle Pribumi Indigenous Indonesian Rupiah (Rp) Indonesian currency Sawa Paddyfields Sewa A fixed cash rent arrangement Sogo shosha (Japanese) Large trading companies Tahu Tofu, soybean protein curd Tebasan System in which standing crops are sold at harvest time, on an area basis Tempe Fermented bean cake Toko Shop inside permanent building Transmigrasi spontan Self-initiated emigration with no government assistance Transmigrasi umum Organized emigration assisted by government Trllk besar Large (5 or 10 ton) truck with diesel engine Tukang tembak Cefllellg, bazaar resaler Tumpangsari Intercropping system Warllng Small grocery store Bibliography

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Abbolt, J. C. 180 Geerlz, C. 2, 14 Abcgglcn, J. C. 172 agricultlll'al involution x, xiii, 8, Adams, D. W. 11 180 Adriano, L. S. 180 entrepreneurship 12, 49, 127, Alchian, A. A. 14 171, 172-3 Alexander, J. 12, 134 Altemeicr, K. 182 Hayami, Y. xiii, 14, 180, 181, 182 Aoki, M. 167 distribution pessimism 9 Arrow, K. J. 14 induced institlltional Asanuma, B. 167, 172 innovation 15 interest rates 45, 46 Bagyo, AI Sri 183 rice harvesting 51 Bardhan, P. K. 14, 180 village community tie 167 Baucr, P. T. 10 Hirsch, L. 180 Bell, C. 180 Hoff, K. 48 Bhaduri, A. 180 Ihalauw. J. 51 B1um, J. 180 International Labollr Office Bockc, J. x, xiii, 8 (ILO) 15 Bohannan, P.J. 2 ßooth, A. 4, 6, 9 Janvry, A. de 180 Bottcma, T. 182 Japan International Co-operation Braverman, A. 180 Agency (JlCA) 79 Brcwster, J. M. 7 Jones, W. O. 2, 10, 181

CGPRT Centre 18, 30, 34 Kawagoe, T. 181, 182, 183 Chayanov, A. V. 3, 180 KikliChi, M. xiii, 180, 181 Cheung, S. N. S. 14 distribution pessimism 9 Christiansen, R. E. 181 interest rates 45 Coase, R. H. 14 rice harvesting 51 Collier, W. 9,51, 181 village community tic 167 Colter J. 181 Kiyonari, T. 172 Lele, U. 2, 10, 181 Dalton, G. 2 Lcnin, V. I. 5 Dccre, C. D. 180 Lewis, W. A. 4, 6 Demsclz, H. 14 Dewcy, A.G. 11-12,37 Makali 9 Drucker, P. F. 2-3, 173 Marx, K. 5 Mayrowani. H. 69 Falcon, W. P. ix-x, 31 Mears. L. A. 180 Fujimoto, A. 45 private truders 10, 11 Furnival, J. S. 7 rice marketing 5, 13, 18

192 Name Index 193

Minumi, R. 172 Scott, G.J. 180, 181 Moir, H. 15 Scott, J. C. 5 More, T. 5 Sethuraman, S. V. 15 Morooku, Y. 46,69, 181 Shuefer, K. 15 Myint, H. 4, 6, 8 Shinohura, M. 167 Siamwulla, A. 14, 180-1, 181 Nukujimu, C. 3 Smith, T.C. 12,13, 171 Srinivusan, T. N. 180 Ohkumu, K. 183 Stulk, G. 172 Ohkuwu, K. 13 Stiglitz, J. E. 14, 48, 180 Olson, M. 14 Sturgess, N. H. 51 Oshimu, H. T. 15 Otsuka, K. 14, 180 Timmer, C. P. ix-x, 11, 34, 181 Tomck, W. G. 2 Putrick, H.T. 167,172 Tussing, A. 13 Pearson, S. R. ix-x Popkin, S. L. 5-6 Udry, C. 48 Unncvchr, L. S. 11, 52 Quisumbing, M. A. R. 180 Utami, W. 51

Resnick, S. A. 4 Von Pischke, J. D. 11 Robinson, K. L. 2 Rohlen, T. P. 167, 172 Whurton, C. R. 3 Rosovsky, H. 13 Wijuya, H. 51 Ruttan, V. W. 15, 180 Williumson, O. E. 14 Winarno, F. G. 30 Schultz, T. W. 9 Wiradi, G. 9 Subject Index

access to markets 80 I, 936 BULOG (Food Logistic agricultural involution 8--9 Board) 175 agricultural marketing xi, 2 price eontrols 11, 13 ammonium sulphate (ZA) 176-9 priee stabilization 34, 174, 181 Ampera, Pasar 124, 183 soybean imports anthropological perspcctive x distribution 34-5, 50, 86, ari.\'an (rotating crcdit 174 association) 183 Azodrin 176~9 capital, scarcity or 45-6 see also credit; interest mtes cash crops 4 Bali 12 see al,w IlIIder indil'idual lIallles bank loans 129, 177, 178-9 cassava 11 bargaining 142-3 Garut Village: farming hClII'on harvesting 51 system 27, 28; bazaar resalers see resalcrs marketing 44; marketing bazaar traders 37--8 margins and profits 59, 60; Ganll Village; marketing processing 31, 62, 63, 65~6; margins 56, 57; prices 55; utilization 29, 30~ I retuil 40,41--2 ijOIl system 96 Lampung Village 87, 88; Lampung Village: farmers' access marketing margins 101, to markets 93, 94, 95; 102; prices 100 farming system 82-3; rice marketing 174, 175 marketing 87, 88; prices and see also town-based tmders marketing margins 104-6; bazaar vendors 38, 123-A, 134 -43, processing 89; 163--4 utilization 84, 85 bargaining 142--3 Majalengka Village 120, 156, 157 credit constraint 139--42 processing 18 family and farming status 138-9 lehasall 51-2 income 137~8, 149, 183 eattle earts 98-9 marketing margins 147~8 CGPRT (coarse grain, pulses, roots prices 142--3, 145, 146 and tuber) crops 18, 27 women in local retlliling 134~6 Garut Village 27--34; farming work 136~7 system 27-9; marketing see also town-based traders products 42-4; production bazaars I, 36, 37--8 seasonality and trade 32-4; periodic 82, 182 utilization and BPD (Bank Pembangunan processing 29-30 Daerah) 46 Lampung Village 82-7; farming BRI (Bank Rakyat Indonesia) 46, system 82~4; production 129, 178-9 seasonality and trade 85-7;

194 SubjecI Index 195

utilization and Lampung Village: cost 91-3; disposal 84-5 farmers 95-6 Majulengka Village: furming Majalengka Village: constraint on system 115-18; income bazaar vendors 139-42; from 153-5, 158, 159-61; costs for vegetable production and producers 176-9 disposul 120 see also credit tying see also ulItleI' imlil'idllal "ames credit tying 11, 166, 168, 180-1 Chinese traders see ethnic Chinese Garut Village 47--50, 73-4, 88 traders Lampung Village 88, 90, 92-3, Cibitung, Pasa/' 124, 126, 144-5, \09 183 Majalengka Village 127-31, class, social 66--7, 75 162-3, 176-8 mobility 48-9 creditors 20 collectors see harn let colleetors; see also I/Ilde/' i"dividual "ames inter-village eollectors; small cucumber 117, 120 collectors; village collectors income from 149-50, 151 collectors' trade credit 128-30, marketing margins 135, 136, 176-8 147-9, 151 see also credit tying prices 145-7; seasonal colonialism 3-7 Ouctuations 121-2; commercialization 3-7 setting 132, 133 community lies 48,49-50, 167-9 Culture System 7 competition 96--7 consignees 124-5, 126, 132, 147 181 contracts 45-52 depots distribution pessimism 9 enforcing 167-9 division of labour 162 see also credit tying Garut Village 35-8, 47-50, 73 corn I I Lampung Village 87-8, 89-93, Garul Village: farming \08-9 system 27, 28, 29; Majalengka Village marketing 43; marketing (gender) 134-5 margins and profits 59, 60; dualism 8, 172 utilization und Dutch colonial policy 7 processing 29, 30, 31 Lampung Village: farmers' access to markets 93, 94, 95; East Java 12 farming system 82-3; economic stability xi marketing 87, 88; prices emcieney, marketing 10-11, 13, 14 and marketing see also marketing margins 99-103; eggplants I 17, 145-7, 151 utilization 84-5 employment generation 15 Majalengka Village 120, 156, 157 Garut Village 25, 67-72; price controls 34, 181 soybean-related Corn Highway 81,96-7 activities 70-2, 75 cottage industry 61, 63-4, 66, 75 see also income; labour credit entrepreneurship 2--3, 15--16 gmlai as informal contraet 26 infrastructure exploitation 96-7 Garut Village farmers 50 in modernization 171-3 196 SlIbject Index entrepreneurship (cO/li.) Franee 180 interregional vegetable trade 126-7 gmlai (pawn eontraet) 26. 46. 181 souree of 11-13 gaplek (dried cassa va chips) Ethical System 7 Garut Village 31. 44. 59. 60; ethnie Chinese traders 38 home processing 62. 63 credit 48. 88. 93. 167-8 Lampung Village 104. 105 exploitation by 10 Garut Bazaar 24. 40 imported soybean 35. 50 Garut Village 16. 17.23-75. 76 regulation 49-50 characteristics 23-6 see also town-based traders ineome and employment ethnic tie 167-9 generation 67-72. 75. 108; comparison with Lampung factor priees 78-80 Village 107-8; farm see also land; wages production costs and faetories.loeal 61.64-6.67. 75 returns 69-70; soybean family status. bazaar related activities 70-2 vendors' 138-9 marketing organization 35-44; farm produetion. ineome from joint farm produets 42-4; Garut Village 69---70. 71 soybean/soybean Majalengka Village 152. 153-5. products 39--42. 182; 158 traders 35--8 farm size 6 priees and marketing Garul Village 25. 26 margins 32-4. 52-60. 74; Lampung Village 78-9. 80. 90 comparison with Lampung Majalengka Village 1\3-14 Village 106-8; farmers 20. 165 soybean 54--7; soybean Garut Village 73--4; and foods 57-8; transpol'tation middlemen 50-I; soybean eosts 52--4 marketing 39. 40; soybean proeessing industries 60--7. 74-5; priees 54--5; lehasall 51-2 categories 61; produetion Lampung Village 109; aeeess to structure 61--6; social markcts and c\asscs and cconomie information 93--6; functions 66-7 marketing 87. 88; soybcan-based farming 27-9; priees 99. 100 distribution of imported Majalcngka Village: ercdit soybean 34-5; produetion tying 127-31. 162; seasonality and trade 32--4; priees 145. 146. 147 utilization and farming systems processing 29-32 Garut Village 27-9 survey details 20, 21 Lampung Village 82--4 trade practices and Majalengka Village 114-18 contracts 45-52; eonditions fertilizer dealers' sale on eredit 129. of peasant marketing 45-6; 177. 178 credit tying and hierarchy of fertilizcrs agents 47-50; farmers and eredit eosts 176-9 middlemen 50-I; differential prieing 128-9 lehasm/ 51-2 fixed-rent tenaney 26 wages 80. 182 Subjecl Index 197

Germllny 180 institutions gOllo (welllthy Jllpllnese adjustment 14-15 pellsllnts) 12-13, 171, 173 infrastructure 97, 169, 170-1 government xi-xii modern 9 market devclopment villllge 6, 7 policies 169--71 intercropping systems market interventions 181; Garut Village 27-9 soybelln 34-5 Lampung Village 82-4 grocery stores (lI'aruf/g) 42, 82 MlIjulengka Village 1 14-18 interest rates hamlet collectors Garut Village 45-6 Gllrut Villuge 36, 37; Lampung Village 90,91-3 credit 47--8; prices und Majalengku Village: bazaar murketing murgins 55, vendors 139-42; vegetable 55-6; soybeun producers 128-9, 162 murketing 40, 41 see al.fo credit; credit tying Lumpung Village 87, 88; prices interlinked translIctions see credit and marketing tying margins 99-100, 101 international trade 85-7 see al.Vt) villllge-bllsed traders see also imports hand cllrts 98 inter-regional trade hired labour 7 Garut Village 32-4 home processing 61,61-3,66,75 Lampung Village 85 MlIjalengka Village 125-34; i;OI/ system 5 I, 96 conditions ror vegetllble imports, soybean 34--5, 42, 85--7 trade 125-7 income 15 inter-village collectors 36-7, 165--7, Gllrut VilllIge 67-72, 75, 108 181 Lampung VilllIge 107-8 entrepreneurship 171 Majalingku VilllIge 149, ISO, Garut Village 106, 107--8; credit 152-61; bazaar tying 47-8. 49; prices and vendors 137--8, 183 marketing margins 55, 56. upland arcas 18-19 57; soybean marketing 39, see al.vo profits; wllges 40-1 India 180 Lampung Village 106. 107-8; Induk, Pa.mr 124, 126, 144-5, 183 marketing margins and industriulization 8-9, 180 profits 10 I, 102; Japan 12-- 13, 180 prices 100 innation 21 Majalengka Village 125-34, 163; informal sector 16 conditions for marketing information, market 93-6, 134, vegetables 125-7; credit 142-3, 169 tying 127-31, 162-3; infrustructure xi income 149, 150; marketing institutional 97, 169, 170-1 margins 132, 133, 148, 149; Lampung Village 96-7, 110 metropolitan market development markets 124-5; payment policies 169-71 modes, price setting and risk innovution 22 sharing 131-4; see also Mujalengka Village prices 146-7 198 Subject Index inler-village colleclors (e0l1l.) marketing organization 87-96; monopolislic practices 168--9 conditions 89-93; .1'('(' also village-based traders differences from Garut involution, agricultural 8-9 Village 87--9; farmers' Jakarla 124 access to markets and cuclllnber prices 121-2, 132, 133 information 93-6 Japan 48, 171, 173 priees and marketing economic development 172 margins 97-108; industrialization 12--13, 180 eassava 104-6; eompared subcontracting 167, 172 with Java 106-8; soybean and corn 99-103; soybean Kadipaten Hazaar 119, 124, 136 producls 103--4; kios see stall shops transporllltion costs 98-9 KOPTI (co-operative of (e/llpe and study details 20, 21 lolil producers) 34-5, 42, 174 wagcs 80, 182 Garut 34-5, 42 land Lampung 86-7 ownership: concentration 6; KOSIPA (Saving and Loan bazaar vendors and 138, 139 Association) 140, 141-2 prices 79 KUD (Village Unit Co land tenancy operative) 140-1, 142, 174, Garut Village 25-6; rents and 175 interest rates 45--6 Lampung Village 78-9, 80 labour Majalengka Village 113-14 division of see division of labour land title eertifieates 97, 169--70 hired 7 Liberal System 7 input in farm production, local consumption, marketing Majalengka Village 154- 5 channel for 122--4, 134-6, 161 opportunity cost, Lampung loeal factories 61,64-6,67, 75 Village 91 processing industries 60-7 Majalengka ßazaar 119 passim, 75 Majalengka Village 17, 22, 111-64 tcchnology and 15, 181 bazaar vendors see bazaar see also wages vendors Lampung Village 17,21-2,76-110 eredit eosts for vegetable environment 77 -82; access to producers 176--9; bank markets 80--1; agrarian 10.111 177, 178--9; eolleetors' structure and factor trade credit 176-8; fertilizer prices 78-80; substitutes for dealers' sale on eredit 177, town bazaar 82; 178 transmigration inter-village collcctors see inter process 77-8 village eollectors farming system 82-4; product prices and marketing utilization and margins 143-52, 164; disposal 84-5, 182; eomparison with soybean produetion seasonality und und rice 150-2; marketing trade 85-7 margins and profits 147-50; infrastructure and prices 145--7; transportation competition 96--7 costs 143-5 Subjeci Index 199

produet innovation 111-22; and commercialization 3-7; agrarian strueturc 112-14; source of from CGPRT to vegetable entrepreneurship 11-13 based farming 114-18; maro (shareeropping linkage with arrangement) 26, 70 markets 119-22 metropolitan markets 124-5 riec marketing 174- 5 middlemen see traders rural ineome generation 149, minibuses 98, 99, 144 150, 152-61; from farm mini-trucks 53-4, 144-5 prodlletion 153-5; total moral economy 5 village and women's molorcycles 98-9 share 159-- 61, 164; from Mrandung 96 trading and processing 156-8 occupations, household heads' stlldy details 20, 21 Garut Village 25 vegetable marketing Lampung Village 78, 79 ChlllllleiS 122--5; Majalengka Village 112-13, 113 loeal 1224; opak (cassava chips) 31,44,59,60, metropolitan 124-5 62,63 market dcvclopment policies 169-71 market efficiency 10-11, 13, 14 p{(sars see bazaars market information 93-6, 134, 169 pawn eontracts (g(/(/ai) 26, 46, 181 market institlltions 169, 170--1 payment methods 95-6, 131 marketing peasants 3 Garul Village 35-44, 45-6 and markets 3-- 13, 180; Lampllng Village 87-96 agricultural pessimism 8--9; Majalengka Village: rice 1745; colonialism and vegetables 1225, 161--2 eormnercialization 3-7; in organization 14, 165-9; village marketing 10-11; sOllrce of base

Garut Village 30, 38; income and to/il 30, 38 employment Garut Village 74-5; income and generation 70-2; marketing employment generation 68, channels 39-42; prices and 70-2; marketing 42, 182; marketing margins 57-8; prices 58; productiOll 64, productiOll structure 63-6 64-5,66 Lampung Village 84, 89, 103-4 Lampung Village 89, 103-4, 182 Majalengka Village 157 tokos (shops) 37-8, 181 see also te/llpe; Il~rll town-based traders 165, 167-8 specialization 3-4 Garut 37-8; marketing margins spontaneous transmigrants 77, 78 and profits 106-8; trade stall shops (kios) 37 credit 48 Majalengka Village 124; Lampung 92-3, 109-10; marketing margins and marketing margins and profit 135--6, 147--8; profits 106--8 prices 145, 146 ,fee also bazaar traders; bazaar see also town-based traders vendors; ethnic Chinese starch 31, 65-6, 89 tradcrs; resalcrs; stall shops storage, cost of 33-4 trade stores (lI'arung) 42, 82 international 85-7; see also string beans 117, 120, 145--7, 151 imports subcontracting 167, 172 inter-regional see inter-regional surplus Irade marketable 45, 90, 180 practices in Garut Village 45-52 'vent for surplus' model 8-9 trade-credit interlinkage see credit tying teh(l,\'(11/ system 182 traders 20, 165-7 Garut Village 43, 44, 51-2 approaching 19-20 Lampung Village 95-6 exploitation by 10--11 technology 9 Garut Village 35-8; farmers labour and 15, 181 and 50-2; hierarchy te/llpe 30 of 47-50, 73 Garut Village 74-5; ineome and Lampung Village 87--90; farmers cmploymcnt generation 68, ami 93-6 70 -2; marketing 42, 182; Majalengka Village 125-43; prices 57--8; producers 40, bazaar vendors 134-43; 41; production 38, 63--4 farmcrs and· 130-1; intcr Lampung Village 89, 103, 182 village collectors 125- 34 Majalcngka Village 156, 157 see (I/.\'o town-based traders; tenancy see land tenancy village-based traders; (/1/(/ title certificates, land 97, 169-70 //lu/er illdividu(I/types tobacco 83 trading restrictions 49-50, 170 Garut Village: farming transmigration process 77--8 system 27-9; transportation costs marketing 43--4; marketing Garut Villagc 45, 52-4, 106--8 margins and profits 59, 60; Lampung Village' 81, 91, 98-9, production 61-3, 65-6, 67; 106-8 utilization and Majalengka Village 125-7, 143-5 processing 29, 30, 31-2 trucks 53-4,98, 99, 144-5 202 Sll/~iel't Index

TSP (triplc superphosphate) 1769 hierarehy 37; t 1I11l/){/Ilg,\'III'; (intereropping marketing 40, 41, 44; prices system) 279, 82A and marketing margins 55, 557, 1068 upland areas 18--19 Lampllng Village 87 -8, 109 10; urea 1769 credit 92- 3; prices and vegetables 168 marketing margins 1002, credit tying 127-31 1068 farming system 115- 18 Majalengka Village: credit income from: farm tying 127-8, 130, 162; produetion 153 5; total marketing margins and village and women's profits 148 -9, 150; share 159 61; trading and prices 1467; vegetable processing 156, 157, 158 marketing 122-3 inter-regional trade sl'e also village-based traders conditions 1257 village community tie 48, 49 50, market linkage 120--1 1679 marketing 1225, 1612; village income 153, 159- 61 local 122 4; village institutions 6, 7 mctropolis 124-5 Village Unit Co-operative marketing margins and (KUD) 140 I, 142, 174; 175 profits 14750; compared with soybean and wagcs 80, 91, 109, 182 rice 1502 prices 1457; seasonal .\'el' a/.\'o income Ouctuations 121-2 l\'a/'wlg (groeery stores) 42, 82 producers' cost 01' credil 128 -9, Watraeo (P.T,) LId 35, 86 wholesalc markct (Pa.\'{//, 1769 AlIlpl'/'a) 124, 183 vent for surplus' model 8 --9 wOl1lcn village-based traders 11- 12 bazaar vendors 123 -4, 134-6, Ganll Villagc 357; credit 73; hierarchy 479 1634; credit constraint 139 42; fmnily LamplIng Village 878 and farming status 138 9; Majalengka Village 122 3, 124 work and incol1le 1368 marketing system 165 7 ineol1le 157 -8; share 01' village .\'1'1' a/.\'o hamlct collectors; inter income 160, 161, 164 village colleetors; small Women's Assoeialion collectors; village collectors villagc collectors 165 (PKK) 13940, 141. 142. Iln Garut Village 36; eredit tying 478, 49; ZA (ammonium sulphale) 176-9