THE EFFECT OF TRANSACTION COST ECONOMICS ON HYBRID CORN FARMING INCOME IN CIHAUR VILLAGE MAJA SUBDISTRICT MAJALENGKA REGENCY

Vina Rachmadina,Zumi Saidah,Eliana Wulandari,Lucyana Trimo

doi:10.17358/jma.18.1.90

Abstract

Transaction costs on corn farming can affect the income of corn farming. This research aimed to identify the transaction cost economics (TCE) structure and analyze the effect of TCE on the income of hybrid corn farming. The research method used is TCE analysis and multiple linear regression analysis. This research was conducted in Cihaur Village, Maja Subdistrict, Majalengka Regency, West Java, on 64 respondents. The research results showed that the transaction cost economics component on hybrid corn farming consists of (1) information cost; (2) negotiation cost; (3) coordination cost; (4) implementation cost; and (5) risk cost. The amount of the transaction cost that is formed on hybrid corn farming was Rp105,421.16. The percentage of transaction cost to total production cost was 2,78%. Coordination costs consisted of meeting cost, and farmer group fees have the highest transaction costs component, leading to 41,96%. On the other hand, risk cost has the lowest prices, merely 3,09%, in which there are avoiding risk cost and controlling risk cost. The results showed that the seven variables tested had significant effects on the income of corn farming. These variables included land area, fertilizer costs, seed costs, selling price, labor wages, productivity, and transaction cost. Keywords: income, farming, hybrid corn, production cost, transaction cost

Highlights

The agricultural sector, especially the food crop subsector, became an important sector with the establishment of increased availability of food sourced from within the country, especially for staple goods commodities such as rice, corn, and soybeans, as the main target of strengthening food supply and diversifying food consumption (Haris et al 2018)
Based on the research done related to transaction costs, this study identifies how transaction cost economics (TCE), ranging from input procurement to harvesting, can affect farmers' income in hybrid corn commodities by showing factors that affect farm income
This study aims to (1) identify the transaction cost economics (TCE) structure in hybrid corn farming; and (2) analyze the factors that affect the transaction cost economics (TCE) structure to the income of hybrid corn farming

Summary

Introduction

The agricultural sector, especially the food crop subsector, became an important sector with the establishment of increased availability of food sourced from within the country, especially for staple goods commodities such as rice, corn, and soybeans, as the main target of strengthening food supply and diversifying food consumption (Haris et al 2018). Half of corn's current use is the main raw material of the animal feed industry, with consumption in 2017 reached 12.7 tons, and the following year, it increased to 13.8 million tons. The selection of corn farming as the object of this research is that corn is a type of cereals or food crops and raw materials for animal feed with high economic value to affect farming income (Bantacut et al 2015). Farmers will benefit from farmers can identify the costs incurred from each transaction (Williamson, 2000)

Objectives

Findings

Conclusion