Opportunities and challenges of implementing the legal policy of the warehouse recipe system in improving farmers welfare and food security

Abstract

Aim: A common agricultural problem in Indonesia is falling prices during the main harvest season. Farmers could not retain their crops any further due to a lack of funds and insufficient storage facilities. This condition is usually exploited by middlemen and loan sharks to make a big profit. The application of warehouse receipts to improve farmer welfare as a marketing model for agricultural commodities is a new innovative term that this study introduces and explores its impact on farmers’ welfare and food security.Methodology: The investigation technique applied was judicial decisions study, supplemented with field conducting advice, by conducting a literature study examining various literature, laws, and regulations. The research team has also carried out field research by conducting in-depth interviews. Researchers are divided into two targets for field research, namely informants from government circles and informants from the community.Findings: Results revealed that juridical the SRG policy made by the government with the aim of the welfare of farmers had provided legal protection for farmers, both in terms of guarantees in banking institutions, other financial institutions, and legal protection for farmers who use the warehouse receipt system, both for disbursing bank loans with guarantees. Warehouse receipts and security in the form of invoices raised can be transferred; Second, in practice, the government policy still faces obstacles in its implementation. The factors that become obstacles include: (1) an unawareness among farmers about the availability of warehouse receipts. (2) The numbers of intermediaries who use warehouse receipts, causing the warehousing receipts to be inaccurate. (3) There are banking concerns about the reduced value of assets in implementing warehouse receipts as collateral; the internal banking regulations constrain this.Implications/Novel Contribution: This article examines the recent innovations and the advantages and difficulties that they present. Its primary focus is on foodstuff logistical, including cost control, material handling, shipping, forecasting, and warehousing receipts. Banks prefer fixed assets or real and fixed assets, and if possible, the value can increase or increase in the next few years. We need intervention from the central and local governments that provide a sense of security for banks in providing credit using warehouse receipt guarantees to improve the farmer’s welfare.