AGRO EKONOMI, Vol 29, No 1, Juni 2018, Hal.102-117 DOI : http://doi.org/ 10.22146/ae.31379 102 Agro Ekonomi ISSN Vol. 29/No.0215-8787 1, Juni (print), 2018 ISSN 2541-1616 (online) Tersedia online di https://jurnal.ugm.ac.id/jae/

PATTERNS AND DETERMINANT FACTORS OF ARABICA COFFEE’S MARKETING MARGIN IN NGADA

Pola Saluran Dan Faktor yang Mempengaruhi Marjin Pemasaran Kopi Arabika di Kabupaten Ngada

1Maria Clara Mau, 2Dwidjono Hadi Darwanto, 2Masyhuri 1Master of Agribusiness Management, Faculty of Agriculture, Universitas Gadjah Mada 2Faculty of Agriculture, Universitas Gadjah Mada Jl. Flora, Bulaksumur, Kec.Depok, Kabupaten Sleman Daerah Istimewa Yogyakarta 55281 [email protected]

Diterima tanggal : 18 Desember 2017 ; Disetujui tanggal : 20 Maret 2018

ABSTRACT Coffee is one of the essential plantation commodities in the development process of plantation sub-sector. is one of the coffee producers in Province. Coffee in Ngada Regency becomes one of the plantation commodities that conceive high potential to be developed. This research aims to discover the established marketing channel pattern, factors influencing marketing margin of Arabica coffee, and the quantity of price received by farmers the in Ngada Regency. The respondents in this research were 59 farmers who were derived randomly and 10 merchants who were derived from snowball sampling technique. This research used interview with a questionnaire as supporting tools in collecting the data. This research analyzed the data descriptively and multiple regression analysis was also conducted through Ordinary Least Square method. The analysis results show that (1) the established marketing channel pattern of Arabica coffee in Ngada Regency are channel I: Farmers - Product Processing Unit – PT. Indocom (sold in the form of red logs coffee that is processed into Hard Skin coffee), channel II: Farmers – PT. Indocom (sold in the form of Hard Skin coffee) and channel III: Farmers – Collected Traders – Retailers – Consumer (sold in the form of coffee beans). (2) The factors that influence the marketing margin are marketing volume and marketing cost. The distance and coffee processing do not have any significant influence towards the marketing margin. (3) The marketing channel that conceives high value of farmer’s share is the marketing channel II.

Keywords: Multiple linier regression analysis, Arabica coffee, Plantation, Marketing channel

INTISARI Kopi merupakan salah satu komoditi perkebunan yang penting dalam pembangunan subsektor perkebunan. Kabupaten Ngada merupakan salah satu daerah penghasil kopi di Provinsi Nusa Tenggara Timur. Kopi di Kabupaten Ngada menjadi satu dari beberapa komoditas perkebunan yang sangat berpotensi untuk dikembangkan. Penelitian ini bertujuan untuk mengetahui pola saluran pemasaran yang terbentuk, faktor – faktor yang mempengaruhi marjin pemasaran kopi arabika dan besarnya bagian harga yang diterima oleh petani di Kabupaten Ngada. Jumlah responden dalam penelitian ini sebanyak 59 orang petani yang diambil secara acak dan 10 orang pedagang yang diambil dengan teknik snowball sampling. Agro Ekonomi Vol. 29/No. 1, Juni 2018 103

Penelitian menggunakan wawancara dengan bantuan kuesioner sebagai instrumen utama dalam mengumpulkan data. Penelitian dianalisis secara deskripif dan analisis regresi linear berganda dengan metode Ordinary Least Square (OLS). Hasil analisis menunjukkan bahwa (1) Pola saluran pemasaran kopi arabika di Kabupaten Ngada yang terbentuk ada 3 yakni saluran I: Petani-Unit Pengolahan Hasil-PT. Indocom (dijual dalam bentuk kopi gelondong merah diolah menjadi kopi Hard skin), saluran II: Petani-PT. Indocom (dijual dalam bentuk kopi Hard skin) dan saluran III: Petani-Pedagang pengumpul kecamatan-Pedagang pengecer-Konsumen (kopi dijual dalam bentuk kopi biji). (2) Faktor yang mempengaruhi marjin pemasaran adalah volume pemasaran dan biaya pemasaran. Jarak dan pengolahan kopi tidak berpengaruh signifikan terhadap marjin pemasaran. (3) Saluran pemasaran yang memiliki nilai farmer’s share yang tinggi terdapat pada saluran pemasaran II.

Kata kunci: analisis regresi linier berganda, kopi arabika, perkebunan, saluran pemasaran

INTRODUCTION with 25.50% (1,814 tons production), Coffee is one of the essential East Manggarai with 17.68 (1,258 ton plantation commodities in the development production) and Manggarai with 8.53% process of plantation sub-sector. The contribution (614 tons production). The important role of coffee is in the context other one center Regency have contributed of fulfilling the domestic needs and/ below 2% values, such as or as the export commodity to produce with 1.80% (128 tons production) (Ministry national foreign exchange. Coffee has its of Agriculture, 2016). own attractiveness for the coffee lovers/ Ngada Regency which is located addict. For most of Indonesian people, in Island is one of the regions that coffee is one of the main beverages beside produce coffee in East Nusa Tenggara tea and others. Coffee becomes a favorite Province. Coffee in Ngada Regency for many people due to the impact of becomes one of the several plantation caffeine as “stimulant material” as well as commodities that conceive high potency a “Lubricator” which supplies energy that to be developed. The potential of Arabica stimulates the heart and brain performances coffee development provides an opportunity (Pobela, 2016). for the coffee farmers to conduct business The centers of Arabica coffee expansion through area expansion and production in East Nusa Tenggara Province production improvement. Beside conducting are located in 5 (five) Regency. Ngada business expansion, another aspect that Regency is recorded as the biggest Arabica needs to be considered in the cultivation coffee producer in East Nusa Tenggara business of Arabica coffee is marketing. Province with 51.35% contribution (3,301 Marketing is one of the efforts tons production), followed by Ende conducted by the farmers in acquiring 104 Agro Ekonomi Vol. 29/No. 1, Juni 2018 rewards for the implemented agricultural channel pattern established in Manggarai business. This becomes very important to and East Manggarai Province is farmers – increase the income of farmers. However, collectors – merchants – exporters. marketing issues are still the major constraint The issue/problem of marketing in production activities. This happened to channel selection/determination is a coffee farmers in Kabupaten Manggarai crucial matter (Sjarkowi & Surfri, 2014 who sold coffee with the Ijon system. Ijon in Chaerani, 2016). The importance of system is a system of sale of crops in a state marketing channel selection /determination still not in the picking of the stem or still is associated to the amount of profit green has not been harvested. Sales with received by each marketing institution. The ijon system have an impact on the selling amount of profit received by the involved price is very cheap. Aloysius Pon is one of marketing institution will influence the the farmers who sold his coffee at IDR 3,000 marketing margin of Arabica coffee – IDR 4,000/ Kg. Even though, the price of (Sairdama, 2013). normal coffee can reach IDR 20,000/ Kg The amount of marketing margin is (Oktora & Dewanto, 2011). Therefore, a highly influenced by several factors such as good marketing system is needed. price, selling volume, marketing distance, Considering the importance of and others. According to Dina (2015), Arabica coffee commodity for farmers, the factors that influence the marketing therefore, the clear/obvious description margin of cacao beans are the marketing regarding the marketing process of Arabica volume, as well as marketing channel II, coffee from the farmers towards the namely farmers-small collector merchants- consumers is required. In the marketing big collector merchants and IV, namely system, the flow process of a product from farmers- big collector merchants-PT. the producers to the consumers is occurs. Pagilaran. The marketing volume provides The important factor in accelerating the positive influence towards marketing flow of product from the producers to margin. This condition shows that the the consumers is the proper selection/ bigger marketing volume will result in a determination of marketing channel. The bigger marketing margin established. The inefficient marketing channel will occur marketing channel II, namely farmers- if the marketing cost becomes higher small collector merchants-big collector and the value of product that being is merchants and IV, namely farmers- big distributed becomes lower (Chaerani, collector merchants-PT. Pagilaran as 2016). According to the research of dummy variables provide positive influence (Hartatri & de Rosari, 2011), the marketing towards the marketing margin. The Agro Ekonomi Vol. 29/No. 1, Juni 2018 105 established marketing margin is emerging METHODS due to the amount of participation/role by the This research basic method is involved marketing institution. The bigger descriptive. The research location was roles provided by the marketing institution purposively determined by considering will result in a bigger establishment of Ngada Regency as one of the biggest marketing margin. A research conducted by producers of Arabica coffee in East Nusa Budiningsih & Utami (2007) mention that Tenggara Province. and West the factors which influence salak pondoh Golewa Districts were determined as (bark) margin are the selling price and research location in Ngada Regency selling system of salak pondoh. The selling because these two areas have the highest price variable provides positive influence coffee production. Total numbers of the towards the marketing margin. It means sample are 59 farmer respondents who that if the selling price of salak pondoh were derived randomly which consist of increases, then the marketing margin 30 respondents from Bajawa District and will increase as well. The selling system 29 respondents from West Golewa District. as dummy variable provides significant The merchant respondents are derived from influence towards the marketing margin. snowball sampling technique. There are 10 This condition occurs because most of the respondents of merchants. This research farmers select the selling system of initial uses an interview with a questionnaire as payment which will increase the marketing the main supporting tools in collecting the margin. This system is selected by the data. farmers due to their emergency needs and The analysis of marketing channel their debt to the village collector merchants. pattern was conducted by identifying the The studies regarding to the marketing institution level in the marketing channel pattern, the factors that influence margin of Arabica coffee. In order to discover the and the portion received by farmers are margin, farmer’s share, profit, and cost in necessary to be conducted because they each marketing institution, as well as the can be a consideration in determining methods are described as follows: the marketing channel that provide high Marketing Margin income for the farmers. In that order, this The amount of marketing margin can research aims to discover the established be discovered through price differences marketing channel pattern, factors that received by the farmers compared to influence marketing margin of Arabica the cost paid by the consumers which coffee and the quantity/portion of price is calculated through the formulation received by the farmers in Ngada Regency. explained below(Asmarantaka, 2012): 106 Agro Ekonomi Vol. 29/No. 1, Juni 2018

MP = Pr – Pf Note: Note: Fs : Farmer’s share (%) MP : Marketing Margin (IDR/Kg) Pf : Price at farmers level (IDR/Kg) Pr : The price at final consumers level Pr : Price at consumers level (IDR/Kg) (IDR/Kg) Pf : The purchasing price at farmers RESULT AND DISCUSSION level (IDR/Kg) According to the research conducted, in general, the marketing institutions In order to discover the factors involved in the marketing process of that influence the marketing margin Arabica coffee in Ngada Regency are of Arabica coffee in Ngada Regency, farmers, product processing unit, district multiple linier regression analysis was collector merchants, and retailer merchants. conducted through Ordinary Least Square Farmers (OLS) method with the model used as Farmers are the marketing institution follows: who plays as the producer of Arabica

Mi = β0 + β1VPi + β2Ci + β3Jk + β4Di + e coffee in Ngada Regency. Farmers conduct Note: marketing function such as exchange Mi : Marketing margin function in the form of selling activity. The VPi : Marketing volume selling of Arabica coffee by the farmers is Ci : Marketing cost conducted in three coffee products, namely Jk : Marketing distance red log coffee, hard skin/parchment coffee, Di : Coffee processing and coffee beans. : D = 0, unprocessed coffee The physical function conducted : D = 1, processed coffee by the farmers including the packaging

β0 : Constanta process, processing/manufacturing,

β1..β4 : Regression coefficient transporting, and storing/saving. Farmers e : error pack the Arabica coffee by using hygienic sack/bag. In processing Arabica coffee, Farmer’s share farmer conducts initial processing before In order to discover the amount selling; however, there are farmers who sell of farmer’s share (portion received by the products without being processed. The farmers), the amount can be calculated unprocessed product is sold by the farmers through the formulation as follows: in the form of red log coffee. There are various transportation processes conducted Fs = x 100% by the farmers. There are farmers who Agro Ekonomi Vol. 29/No. 1, Juni 2018 107 transport the coffee by motorcycle or parchment coffee is 12%. If the coffee does transport car, however, there are farmers not meet this standard then the farmer will who transport the coffee by foot due to the receive a low price. close distance between the farmers and the merchants’ locations. Farmers usually save/ Product Processing Unit store the coffee in the form of the coffee The product processing unit is a bean. This activity is conducted to provide marketing institution that acts as a trader supplies for consumption or in the time of who purchases Arabica coffee directly emergency needs that requires the coffee from the farmers. The marketing functions to be sold. performed by the product processing unit The facility function conducted are the function of exchange, physical by the farmers includes the activities function, and facility function. The of shorting, risk financing, and market exchange function performed by the information. Shorting activity conducted product processing unit is the buying and by farmers only occurs for red log and hard selling activities. The processing unit skin coffee. The shorting activity for red purchases coffee from the farmers in the log coffee is conducted by separating the form of red log coffee and sold the coffee red-color coffee with the green or black- to PT. Indocom in the form of hard skin/ color coffees. This activity is conducted parchment coffee. because the selling of red log coffee has to The product processing unit performs be in accordance with the standardization physical functions such as processing, provided, which is 95% of the red fruit. The packaging and storing. Processing activity shorting of hard skin coffee occurs in the conducted by the product processing unit manufacturing process which is conducted is processing the red log coffee into hard by separating the coffee bean from its skin. skin/parchment coffee. The hard skin Some farmers conduct financing coffee is later being packed in clean sacks. activity because they employ labors who The packed Coffee is sold and stored help the coffee manufacturing process. as supplies to be processed into coffee In general, the risk faced by the farmers powder. Transport activity is not conducted occurs when the coffee that is sold does because the buying and selling processes not meet the standard. This condition take place at the location of the product happens when the farmers sell the coffee processing unit. in the form of hard skin/parchment coffee. The product processing unit performs The problem is related to the water content the facility functions in the form of sorting where the water content for hard skin/ activities, financing, risk management and 108 Agro Ekonomi Vol. 29/No. 1, Juni 2018 market information. The sorting activities, by the collected traders is in the form financing, and risk management which of financing and market information. is conducted by the processing unit are Collected traders spend the cost used to pay the same with the activity conducted labors and market information activities by the farmers who perform hard skin related to the selling price of coffee. The coffee processing. Regarding the market information of coffee’s selling price usually information, the product processing unit obtained from fellow traders/merchants. conducts an agreement regarding the price of red log coffee and hard skin coffee. The Retailers determination of selling price is usually Retailers are the marketing institution conducted between the product processing that acts as a merchant who purchases unit, farmers, and PT. Indocom. In addition Arabica coffee from the collected traders. to price, the market information provided The marketing function performed by the by the product processing unit is the quality retailers is almost the same as collected of the coffee that is in accordance with the traders. The difference lies in the physical determined standard. function regarding the transport activity and the facility function of financing Collected Traders activity. Retailers conduct transporting Collected traders are the marketing activity while district collector merchants institution that played as traders who are not because the buying and selling purchase Arabica coffee from the farmers. processes take place at the collected traders The marketing function conducted by location. The retailers do not conduct the collected traders is the function of financing process because the marketing exchange, physical function, and facility activities are performed independently by function. Exchange function is conducted the retailers. in the form of buying and selling activities. Collected traders purchase Arabica coffee The marketing channel pattern of Arabica from the farmers in the form of coffee coffee in Ngada Regency beans and then sold the coffee beans to the The marketing channel is closely retailers. The physical functions performed associated with the establishment of by the retailers are packaging and storage. customers’ value that frequently mentioned Usually, the coffee is packed by using in supply chain. In particular, the a sack and simultaneously performs the marketing channel is an aspect in which storing process. the establishment of the final value of The facility function conducted the tested chain in relation to the final Agro Ekonomi Vol. 29/No. 1, Juni 2018 109

Figure 1. Marketing channel pattern of Arabica coffee in Ngada Regency Note: 1. The channel of Arabica coffee in the form of red log: 2. The channel of Arabica coffee in the form of Hard Skin (HS): 3. The channel of Arabica coffee in the forms of red log and coffee bean: consumers (Kozlenkova, Hult, Lund, resulted in the form of hard skin/ Mena, & Kekec, 2015). There are three parchment coffee which later sold patterns of established marketing channels to PT. Indocom. Product processing of Arabica coffee described as follows: unit is a place where the process a. Marketing Channel I, in this channel, of buying and selling transactions the respondent farmers (35.59%) sell between farmers and PT. Indocom are the coffee in the form of red log by Rp performed, and product processing 5,000/kg price to product processing unit is responsible to supervise the unit. The process of coffee selling to the entire selling activities in order to product processing unit must meet the diminish any fraud that could harm/ requirements of 95% average percentage disadvantaging both farmers and the of red fruit without any green or black PT. Indocom. logs. Then, the processing unit performs c. Marketing channel III is the marketing the manufacturing process from log channel in which 22.03% of the farmers coffee into hard skin/parchment coffee respondent sell coffee in two forms: which later sold to PT. Indocom with red log coffee and coffee bean. The red the price of Rp 12.500/Kg. log coffee is sold to product processing b. Marketing channel II, this channel units while coffee bean is sold by distributes coffee in the form of Hs the farmers to the collected traders. (Hard skin) coffee with 42.37% of Subsequently, the collected traders farmers’ respondents. In the second sell the coffee to the retailers, and then marketing channel, farmers conduct from retailers, the coffee is sold to the coffee manufacturing process until consumers. 110 Agro Ekonomi Vol. 29/No. 1, Juni 2018

The marketing system in Ngada price game by the wholesaler who can put Regency for red log coffee and hard skin the farmers in disadvantage situation. coffee is different from the coffee bean The existence of this cooperation marketing system. The marketing of red creates a relationship of trust and log coffee and hard skin coffee is conducted commitment between the two parties, thus, through one door marketing. This means the marketing process will run properly. that the coffee from farmers is sold to the According to Mukhsin (2017) , trust is the product processing unit. This cooperation foundation of a business. Trust must be is a condition that maintains the stability established from the beginning because it of coffee prices, thus, there is no longer a is an important factor to create customer

Table 1. Marketing Margin of Arabica Coffee in Ngada Regency Marketing Channel Marketing Institution I II III (IDR/Kg) (IDR/Kg) (IDR/Kg) FARMER Marketing Cost 363 2.198,1 915 Selling Price 5.000 12.500 28.000 Profit 4.637 10.301,9 27.085 Margin - - - PRODUCT PROCESSING UNIT Purchasing Price 5.000 Marketing Cost 2.125,1 Selling Price 12.500 Profit 5.374,9 Margin 7.500 COLLECTED TRADERS Purchasing Price 28.000 Marketing Cost 940 Selling Price 30.000 Profit 1.060 Margin 2.000 Retailer Purchasing Price 30.000 Marketing Cost 875 Selling Price 35.000 Profit 4.125 Margin 5.000 Margin Total 7.500 0 7.000 Source: Primary Data Processed, 2017 Agro Ekonomi Vol. 29/No. 1, Juni 2018 111 commitment. Commitment is a desire to margin at the merchant level is caused by maintain a relationship. Commitment as coffee processing activities. This difference an important variable in determining the in the form of coffee that is already sold success of a relationship. The higher the affects the established price. commitment formed from satisfaction The second channel is the shortest and trust, the higher the quality of the channel. The total marketing margin on relationship between marketing actors. the second channel is zero. This condition Both trust and commitment produce a reveals the absence of price range or hope that can extend a relationship (Zhou total margin value because the farmers et al., 2015). are directly selling the Hs coffee to PT. Indocom. Marketing margin The third marketing channel is the Table 1 shows the difference of longest channel because this channel has the coffee price sold by the farmers. The two intermediary institutions namely difference of coffee price is resulted from district collector merchants and retailers. the different forms of coffee that sold by But the established margin in this channel is farmers; some are sold in the form of red lower than the first channel. This condition coffee, hard skin coffee, and coffee beans. is not parallel with the opinion expressed by The difference of price of coffee sold by Widati (2011) who mentions that the more the farmers will affect the price at the next involvement conducted by the marketing marketing institution level. According to institution, the greater the marketing Yuniarti (2017), the difference of selling margin formed/established. prices of each marketing institution will Marketing margin established also determine the amount of marketing in marketing channel I is higher than margin. The high level of marketing marketing channel III. This condition is margin occurs due to the activity process caused by the marketing channel I occurs performed by every marketing institution. coffee processing process that affects the The margins on the first channel are price formed. In the marketing channel I, very large as a result of coffee processing. the farmer sells in the form of red coffee to Farmers sell the red log coffee to the the processing unit, then the processing unit processing unit to be processed into hard proceeds to the processing into the form skin coffee. of horn leather coffee. In the marketing This condition is in accordance with channel III, the form of the coffee sold is the research conducted by Sairdama (2013) the same coffee beans from the farmers to who explains that a massive marketing end consumers or without processing 112 Agro Ekonomi Vol. 29/No. 1, Juni 2018

Table 2. The t-test results of factors that influence the marketing margin

Variable Regression Coefficient t significant Constanta 9415.758 0.0000 Marketing volume (VPi) -2.6200*** 0.0000 Marketing Cost (Ci) -3.3860*** 0.0000 Marketing Distance (Jk) 39.5230ns 0.3775 Dummy: coffee processing (Di) -268.2513ns 0.5764 R² 0.9302 Adjusted R² 0.9250 Prob. F-count 0.0000 Source: Primary Data Processed, 2017 Note: *** = significant at the trust/confidence level of 99% (α= 0.01%) ** = significant at the trust/confidence level of 95% (α= 0.05%) ns = non-significant

Factors that influence marketing margin the Arabica coffee marketing volume has of Arabica coffee a negative effect on the marketing margin. According to Table 2, the formulation Therefore, it can be explained that if the of multiple regression analysis of marketing Arabica coffee selling volume is having 1 margin of Arabica coffee in Ngada Regency Kg increase, then the marketing margin will is as follows: decrease by IDR 2.620027. This means that Mi = 9145.758 – 2.620027(Vpi) – the greater the selling volume will results 3.385989(Ci) + 39.52299(Jk) – in a smaller value of established marketing 268.2513(Di) margin. These results are consistent with the research conducted by Dina (2015). Marketing Volume In table 2, the regression results Marketing Cost for Arabica coffee marketing volume Marketing cost as the independent shows a significant value of 0.0000. The variable on t-test result that is presented significant value is less than the 99% in table 2 shows 0.0000 significant value. confidence level (α = 0.01), it means This significant value is less than the 99% that the selling volume significantly confidence level; it means that the marketing influence the marketing margin. The cost significantly influences the marketing value of regression coefficient of selling margin. The value of regression coefficient volume is -2.6200. This result means that of Arabica coffee marketing cost is -3.3860; Agro Ekonomi Vol. 29/No. 1, Juni 2018 113 this value generates negative influence to not significantly influence the marketing the marketing margin. Based on the value margin. These results are in line with of regression coefficient of marketing cost; Sega’s (2012) study which explains that the increase value of marketing cost of the marketing distances have no significant explained Arabica coffee can be explained, effect on the marketing margins. The which experience IDR 1 increase, thus, the similar result is proposed by Mustadjab et marketing margin will decrease by IDR al (2008) who mentioned that the marketing 3.3860. Negative relationship between the distance has no significant influence on the marketing margin and the marketing cost is change of marketing margin. caused by the similarity of price received by farmers. This result means that the amount of Coffee Processing (Dummy Variable) marketing costs spent by farmers will have no Dummy variables of coffee form in influence towards the change of coffee price. the results of t-test analysis presented in In addition, the participation of farmers who table 2 shows -268.2513 value of regression are members of the product processing unit coefficient. This value negatively influences will help to minimize the costs. the marketing margin. According to the result of regression analysis; the significant Marketing Distance value for dummy variable is 0.5764. The The marketing distance in the significant value of the dummy variable result of t-test analysis that is presented is bigger than 99% and 95% confidence in Table 2 shows 39.5230 regression levels, which means that the dummy coefficient value. This value has a positive variable has no significant influence on the influence towards the marketing margin, marketing margin. but the marketing distance shows 0.3775 significant value. The significant value of Farmer’s share marketing distance is higher than 99% and Farmer’s share is the percentage of 95% of the confidence level value, which the price received by the farmers at the price means that the marketing distance does spent by the consumers in each marketing

Table 3. The analysis of farmer’s share on the marketing of Arabica coffee in Ngada Regency Marketing Price at Farmers level Price at Consumers Level Farmer's share Channel (IDR/Kg) (IDR/Kg) (%) I 5000 12500 40 II 12500 12500 100 III 28000 35000 80 Source: Primary Data Processed, 2017 114 Agro Ekonomi Vol. 29/No. 1, Juni 2018 channel. The price of coffee in each channel The importance of coffee commodity is varies because of the different forms of is not only as nation foreign exchange but coffee in the selling process. The results of also its role as the source of income for the farmer’s share analysis on the marketing coffee farmers which approximately half a of Arabica coffee in Ngada Regency are million people in . The success presented in Table 3. of coffee agribusiness requires the support The highest farmer’s share is in the of all parties involved in the process of second marketing channel (100%). This production, processing and marketing of condition occurs because in the second coffee commodity (Rahmania, 2017). Once channel there is no intermediary institution again, marketing becomes an important that distributes the Arabica coffee, thus, the factor in increasing farmers’ income; marketing chain is getting shorter. The short therefore, efficient selection of marketing chain of coffee marketing process occurs channels is required. It is also explained by because coffee farmers in Ngada Regency Desiana (2017) that the marketing channel are the members of the Product Processing is a part of the whole process that delivers Unit. This result is in accordance with the value to customers. research conducted by Sujiwo (2009)who According to (Lestari et al., 2017), suggests that the steps performed by coffee marketing efficiency is an effort to increase farmers in Singorojo District of Kendal the flow of goods from producers to Regency to cut the marketing chain is by consumers and the ability to see the combining the farmer groups and establish difference in prices received by farmers and a marketing business agency called the paid by the end consumers. Profit margins Joint Farmer Group (Gapoktan). received by farmers are determined based Aside from that, in the second on marketing channels, where the length of marketing channel; the farmers have marketing channels make the involvement performed their own processing of Arabica of marketing institutions is more frequent, coffee. Farmers’ knowledge regarding the thus, the that marketing institutions are coffee processing which in accordance more enjoying the profit margins of farmers with the standard operating procedure with exporters. (SOP) gets a better result. The added value Based on the result of this research, generated by the farmers will provide the marketing channel II is the most efficient farmers a higher share. The higher level of channel because it has the lowest margin farmer knowledge regarding Arabica coffee of Rp 0 and the highest farmer’s share processing will have an impact towards the value of 100%. This means that the lower increase rate of farmers’ income. the marketing margin and the higher the Agro Ekonomi Vol. 29/No. 1, Juni 2018 115 value of farmer’s share, it can be said that SUGGESTION the marketing is efficient. Selection of the The farmers of Arabica coffee are right marketing channel by arabica coffee suggested to select the marketing channel farmers impact on the part received by of Arabica coffee properly, therefore, it large farmers. provides the bigger portion received by the farmers. CONCLUSION The farmers of Arabica coffee who There are three marketing channels have not included as the member of product regarding the pattern of marketing channel processing unit are expected to become a of Arabica coffee in Ngada Regency. member. This condition aims to minimize Channel I: Farmers-Product Processing the cost spent in the process of Arabica Unit-PT. Indocom [coffee sold by the coffee marketing and for the farmers to be farmers in the form of red log coffee to the strong in determining the price of Arabica product processing unit, and then the product coffee. processing unit conduct manufacturing process to produce coffee in hard skin/ REFERENCES parchment form], channel II: Farmers-PT. 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