Copra marketing in inderagiri hilir a region analysis

Abstract

Coconut production in Kabupaten Indragiri Hilir is similar to coconut production areas in other parts of Indonesia which is a multi-faceted enterprise. Product- ion is widely scattered throughout the district. However, new plantings are predominantly located in the frontier areas of the district. Farm sizes range from under one hectare to very large, well over 100 hectares. However, most of the farms are family sized units, with approximately 70 percent of the farms being from two to ten hectares in size. These farms occupy about 60 percent of the coconut hectarage in Indragiri Hilir. Productivity varies greatly according to the various management practices used. Fertilizer is rarely practiced except at the time of planting of the coconut seed. Some farmers also use vitriol ("terusi") as an additional fertilizer application during growth and production. Thus, the main measurement for management practice was the frequency of clearing the plantation. Presently, the proportion of old palm is increasing each year because new plantings have been on a small scale. Yield of nuts per bearing tree is below what could be achieved through a higher proportion per year of new plantings and better management practices. The market structure within the coconut marketing area of Indragiri Hilir indicated a monopsony and an oligopsony framework at the interinsular level. The oligopsony is not only by firm but also by product use. However, within the copra marketing structure, including the Jakarta copra market, competitive forces do prevail. Vertical integration in the form of physical owner- ship of market facilities at various levels does not exist. However, several marketing firms extend credit, tied to the delivery of copra. Thus, the result resembles, in large part, a vertically integrated structure. Prices at the various marketing levels appear to be directly related to each other. The price differences between each market level depend on marketing costs at each level. A price change at the coconut oil industry level (Jakarta price) is reflected back to the village price. There is an economic incentive for the large plantation operator to produce a higher quality copra compared to small operators. Part of this incentive is due to the act that small producers are not able to afford adequate drying and storage facilities since they would frequently