Factors Involved in the Process Cane into Sugar in Indonesia

Abstract

The Indonesian sugar economy is quite worrying due to the increasing of imported sugar from year by year. Therefore it is necessary to study, what factors are involved in the Indonesian sugar economy and how far these factors play a role in the arena of sugar economy.This study is based on secondary data from the years 1983-2013, from several sources such as BPS, AGI, USDA, and the World Bank. Then the data is poured into models are made in such a way that are similar to the actual conditions, according to the theory of agricultural economics. SAS version 9 is utilized to process the data, with technique of simultaneous link.The result says, factors affecting cane field is the price of sugar (Pg), while the price of paddy (Pa), Price of corn (Pj), and lending interest rate (ir) are not significant. Whilst, factors affect cane productivity are the price of sugar (Pg), lending interest rate (ir), and price of Urea (PfUrea). Factors that influence sucrose-content rate, those are time (t) and ratooning. Increasing the frequency of ratooning, the better the results of sucrose-content. Factors affecting domestic sugar demand are the price of sugar (Pg), population (Pop), income level (Ini), and the previous year's sugar demand (Dg1). In the marketplace, factors affecting Indonesian sugar import is the difference between sugar demand (Dg) and sugar production (Qg), time (t) and sugar imports in the previous year (Mg1). The factors that affect the price of sugar is the world sugar price (PWg), the Rupiah exchange rate against the USD(ERI), Nominal Rate of Protection (nrp), Cost of Sugar Cane Growers (HPP) and the price of sugar a year earlier(Pg1), while Indonesian sugar supply(Sg) is not significant.