Abstract
The purpose of this study was to know and analyze the shallot markets of Central Java with shallot markets in East Java, Jakarta, and West Java. The method of data analysis in this study is the Johansen Cointegration Test, Causality Test, and Vektor Error Correction Model (VECM). The data used is secondary data in the form of monthly sources from the Central Statistics Agency and the Ministry of Agriculture. The results of the research are producer markets and consumer markets in Central Java are integrated, the Central Java producer market and the East Java consumer market, Jakarta consumer market, and West Java consumer market are integrated, the Central Java consumer market and East Java consumer market, Jakarta consumer market, and West Java consumer market are integrated. Based on the trial of the causality of market integration carried out is weak, only the consumer market integration of Central Java with East Java consumer market is strong. Based on the results of the VAR / VECM analysis shows that adjustment of the prices of shallots in Central Java producer market slower than adjustments of the price of Central Java, East Java, and Jakarta consumer markets. Efforts to overcome this problem can be done by increasing the implementation of policies on the floor price and the ceiling price.
Highlights
Central Java is the largest center of shallot production in Indonesia
Fluctuations in commodity prices adversely affect the welfare of producers and consumers because during the harvest season prices will fall so that producers' income is low while in conditions not harvest season will harm consumers because commodity prices will very high (Prastowo, Yanuarti, & Depari, 2008).Price fluctuations occur because of the asymmetry of price transmission caused by adjustment costs and market forces of retailers and the behavior of marketing agents to take profits because price information is often manipulated so that price information from the consumer market to producers and from producers to consumers is asymmetrical (Ruslan, 2016)
The data has been stationary to the same degree, that is to degree 1 (1). This is indicated by the probability value of t-Augmented Dickey-Fuller (ADF) that is smaller than the 5 percent significance level
Summary
Central Java contributes to the shallot production in Indonesia by 32,40 percent (BPS, 2018a). Shallot production ranks first as the largest horticultural commodity produced in Central Java compared to several other leading commodities. The price of shallots on the producer market tends to be very low compared to prices on the consumer market. The Central Statistics Agency (2018b) states that the distribution pattern of shallot trade in Central Java starts from upstream, namely from farmers to collectors by 16,38 percent, to wholesalers by 0,28 percent, to retail traders by 3,04 percent, outside the remaining 79,97 percent, and the final went to households. The shallot supply in Central Java, in addition to originating from its production, originates from outside the province, namely, from East Java by 12,17 percent and Yogyakarta by 2,03 percent (BPS, 2018b)
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