LITERATURE STUDY ABOUT HALF RUBBER TREATMENT PROCESSING BY VILLAGE OWNED ENTERPRISES AS EMPOWERMENT IN INCREASING RUBBER FARMERS INCOME IN RURAL

Abstract

Three ASEAN countries such as Thailand, Malaysia and Indonesia are the main producers of natural rubber in the world and the need for natural rubber continues to increase. But in Indonesia, several studies have shown that rubber farmers are still suffering from poverty due to low rubber prices. One problem is the low quality of smallholder rubber plantations and the length of overseas supply of sales so that the portion of farmers' income becomes small. Empowering and strengthening the economic institutions of rubber farmers are needed. Law No. 6 of 2014 concerning Villages mandates the establishment of Village Owned Enterprises (BUMDes) as one of the village economic institutions in processing village potential. This study uses literature studies by analyzing some relevant previous studies. The results showed that the processing of semi-finished rubber can improve the quality and selling value of processed rubber materials and increase the income and welfare of rural rubber farmers. The limited resources of rubber farmers is an opportunity for BUMDes as an economic institution for rubber farmers. However, there are studies that show that patron-client relations between farmers and long-established traders can be a barrier if they are not involved in institutionalizing BUMDes as an economic institution for rubber farmers in rural areas. This study recommends the need for a feasibility study of a semi-processed rubber processing business in villages that have potential rubber plantations, including building cooperation between villages and involving collecting traders as shareholders of BUMDes and village government.