Abstract
Difficulty in market information access, low prices and quality of farmers’ production, lack of facilities and infrastructure, needs of wood supply in a quick and large quantity have generated a partnership scheme which governs the farmers and industries to make a contract that binds and controls elements of production without having them. This study assessed the performance of partnership between a farmer group of “Binawarga Tani” and sawmills of UD Jaya Abadi, UD Dalfa Kamila, UD Putra Mandiri in Leuwisadeng, Bogor District. Comparative descriptive analysis states that partnership between the farmer group of Binawarga Tani and three sawmills has provided adequate results for both parties (mutual benefits) with an increase in the value of production and sales better than conditions before the partnership. UD Jaya Abadi has had a strategy of product diversification and marketing that are not owned by the competitors. Partnership influences the value of cash inflows and is able to produce a surplus of cash for the actors of the partnership. Statistical analysis shows that the cash surplus of farmer group and three sawmills before and after the partnership is significantly different. The farmer group is able to achieve business efficiency with better break-even point each year. Financial performance of farmer group and partners has been improved with delta Net Present Value (NPV) of Rp14.589.233 for the farmer group, Rp88.599.757 for UD Jaya Abadi, Rp35.726.194 for UD Dalfa Kamila, and Rp96.738.609 for UD Putra Mandiri. The partnership has created business sustainability through the certainty of market and raw material supply. Keywords: trade partnership, farmer group, sawmill, financial performance
Highlights
At the beginning of agricultural commercialization in the decade of 1970, the major problem faced by the Indonesian farmers was how to sell their products to the market
Calculation result of the partnership by using Internal Rate of Return (IRR) method shows that the IRR values of the farmer group, UD Jaya Abadi, UD Dalfa Kamila, dan UD Putra Mandiri are higher than applicable interest rate (18%), indicating that trade partnerships are stated to be feasible
General trade partnerships have a positive influence on the financial performances of the farmer group and three sawmills with the delta value Net Present Value (NPV) of Rp14.589.233 for the farmer group, Rp88.599.757 for UD Jaya Abadi, Rp35.726.194 for UD Dalfa Kamila, and Rp96.738.609 for UD Putra Mandiri
Summary
At the beginning of agricultural commercialization in the decade of 1970, the major problem faced by the Indonesian farmers was how to sell their products to the market. Key Performance Indicators of the Extension field and Human Resources Development Ministry of Forestry (IKU Kemenhut) aim to establish 10 partnerships through enhancement of participation of key actors and businesses in the community empowerment (Ministry of Forestry, 2012) In accordance with these targets, the local government, in this case Forestry Agency and Counseling Agency in every area have the duty to encourage and facilitate the farmers in the region to build a good partnership with the private sector (businesses) through good coordination, so that the capital constraints, infrastructure, as well as knowledge and technology problems faced by farmers can be minimized. According to the Decree of the Minister of Agriculture of 940/Kpts/OT.210/10/1997, partnerships between farmer group of "Binawarga Tani" and the sawmills in this study is a general trade partnerships where the partner group (farmers) supplies the needs required by a partner company (sawmills) In this partnership, sawmill as the owner of the infrastructure in the form of sawmill machine has the function to process logs into sawn timber or pallet for subsequent sale to the manufacturers/consumers. Analyzing business performance of farmer group and sawmills of UD Jaya Abadi, UD Dalfa Kamila, and UD Putra Mandiri using financial criteria NPV, IRR, B/C Ratio, and assumption "with" and "without" partnership
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: Indonesian Journal of Business and Entrepreneurship
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
