Integration of unorganized farming natural rubber markets in South Sumatra

Abstract

The income of rubber farmers from the sale of rubber processing material received by farmers who apply an organized and unorganized marketing system is different. The prices received by organized farmers are higher because they participate in the Processing and Marketing Unit for Rubber Processing Material (PMU) and carry out auction system sales and partnerships. The income of organized farmers is very different from that of unorganized farmers. The determination of the research location was carried out purposively. Farmer price data was taken in Banyuasin, Musi Banyuasin (Muba), and Ogan Komering Ilir Regencies, South Sumatra Province. The three districts have the largest rubber plantation area in South Sumatra and Indonesia. The data used are primary and secondary. Data processing is done quantitatively and qualitatively. The analysis tool used is multiple linear regression with panel data with the help of R-Studio software with the Vector Autoregression (VAR) or Vector Error Correction Model (VECM) method. There is long-term integration of the rubber market between the three regencies and short-term integration in the Banyuasin and Ogan Komering Ilir districts. However, there is no short-term integration between unorganized farmers' markets in Banyuasin, Musi Banyuasin, and Ogan Komering Ilir District. If the rubber price in one of the sample districts experiences a shock, the district experiencing the shock can return to normal on an average of the 14th period or 14 weeks after the shock occurred.