| dc.description.abstract | Inquiry on the ideal form of business partnership among constituents along the value chain of salt business is the main theme of this study. Majority of Rembang Residents’ coastal community depend on salt business. Salt farmers, middleman, salt processing companies and large traders involve in such business. Salt farmers themselves can be divided into three groups, they are salt field labour, field owner and field owner-labour. In addition, there are business bond between salt farmers-field owner, field owner-middleman and middleman-salt processing companies or middleman-large traders. This phenomenon indicates that asymmetric market information accepted by salt farmers mislead them to take the actual price as the best share. This study aims to identify how partnership institutional among stakeholders in salt business perform. Moreover, the study tries to analyse and formulate a business model that is able to provide welfare improvement for business constituents proportionately, especially salt producing households (“salt farmers”) in the District of Rembang. The results of this study show two patterns of partnership as the following :(1) profit-sharing partnership between salt farmers-field owner; and (2) marketing partnership between field owner-middleman, middleman- salt processing companies and middleman-large traders. All partnerships, which are based on verbal/handshake deals, are yet ideal since partly members have weak bargaining position and could not freely choose a fair transaction due to bonded capital system. Income analysis, institution analysis and marketing efficiency find that middleman, processing industries and large traders gain larger profit than salt farmers and field owner. Bonded capital system put farmers in a weak position hence, the profit unfairly shared among constituents. An alternative business model is proposed. That is, involving the establishment of farmers cooperative as the new partner for farmers, salt processing companies and middleman. In this new model, the farmers sell their products to cooperative directly. On the other hand, specific products for certain industries (feed industries, fertilizer industries and salty-fish industries) can be offered to middleman by the farmers. In order to ensure the salt processing companies as a potential partner, cooperative group has to compete with middleman by producing fortified salts which has better quality. This established cooperative group should be transparent, accountable, independent, fair, active and able to create value added of its products. If the cooperative group exists and conducting all the rules above, it is predicted that level of income would rise by 49,19% for farmers, 38,36% for field owner-farmer and 2.01 for salt processing companies. In contrast, field owner and middleman would gain lower income by 3,01% and 25,40%. Moreover, it is calculated that transaction cost decreased by 30,63% for farmers; 79,54% for field owner; 76,26% for field owner-labour; 58,89% for middleman; and 34,74% for salt processing companies. In particular, establishing the cooperative group will not affect large traders since cooperative group is not targeting large partneships. The marketing margin analysis shows while the proposed channel marketing (salt farmers-cooperative-processing industry) has the least marketing costs, it is operationally most efficient channel. Moreover, the farmers will receive the share price better (30.43%) compared to the current share price of most farmers received (25.62%), so it is relatively able to increase the motivation of farmers to increase production. The farmers cooperative appearance along the value chain of salt business in Rembang District provide more advantages for farmers, field owner-labour and salt processing companies while field owner and middleman got less benefit. According to pareto compensation theory,the field owner and middleman as the loss party should receive compensation as the new regulation imposed by the government. A significant lower of transaction cost could be the compensation for the field owner. The government should compensate the middleman for its loss by giving recommendation in accessing bank funding and giving opportunities to increase its business scale through government facilities. | en |
