Abstract
This study aims to examine the marketing channel optionsavailable for corn producers in South Sulawesi, the production center in Indonesia, as well as impact of such a choice on their income level. The target group was corn producers and corn traders. The total sample comprised 150 people, consisting of 120 corn producers and 30 corn intermediary traders within South Sulawesi Province. The results showed that three marketing channels accessed by producers are zero-level, one-level, and two-level channels. The net profit margin obtained by intermediary traders per kg is different by types for each marketing channel due to different marketing activities leading to different costs spent. The most efficient marketing channel is the zero-level channel that conducts direct selling to breeders. It followed by the one-level channel (from farmers to collectors and consumers). Finally, the two-level channel (from producers to merchant traders) showed the lowest efficiency. It should be mentioned that the zero-level channel offers a slight price increase for producers compared to other channels. Its consumers only buy limited number of products so that it does not have a wide impact on producer’s welfare. The study also found high input costs spent to cultivate corn due to land rent, fertilizers, and pesticides. AcknowledgmentThe welfare of corn producers and marketing channel choice is part of an internal research grant project from Hasanuddin University. The research involves the regional government at village and sub-district level, and farmer groups in villages within the Province of South Sulawesi.
Highlights
The net profit margin obtained by intermediary traders per kg is different by types for each marketing channel due to different marketing activities leading to different costs spent
The results indicate that the total average costs incurred by farmers in each season reach is about intermediary at a consumer level (IDR) 6,120,169, which consists of IDR 131,790 fixed costs and IDR 5.988,379 variable costs
The study aims to examine marketing and distribution channels, as well as input costs spent by corn producers that could possibly affect their welfare
Summary
The study extends the existing literature by linking the matters of the efficiency of marketing and distribution channels and input costs, which could possibly affect the selling price at the corn producer level. These two matters together could cause a severe impact on producer’s welfare (Dastagiri et al, 2012). Even when there is a slight difference in selling and buying prices within each channel, but when marketing distribution involves a number of players, it causes a vast price difference between producers and consumers These two reasons are corroborated by the fact that farmers in each producing area might have a different relationship to the market, which affects price response at a farmer level. The results are used to analyze the efficiency of corn movement in the marketing channel accessed by producers
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