The Impact of Rubber Auction Market Towards Transmission Price for Farmers in Jambi Province

Abstract

Rubber is a small-scale plantation cultivated by smallholders. Jambi Province is one example that crucially depends on its agricultural sector, like rubber. Rubber does have the potential to be one key to economic and social development in the rural area, improving the socio-economic situation of millions of farmers in Jambi Province. However, the farmers do not have the bargaining power to determine the rubber slab's price to the traders. One distribution channel tries to help farmers get a higher price from the trader through the auction market. The objectives were analysing the rubber auction market's and impact on farmers' transmission price by using a descriptive method to describe the change in price received by the farmer in the auction market and counting the price transmission elasticity through simple regression farmer share. The result shows that farmers only got 40-60 percent from selling their rubber in the auction market. This condition explains the vulnerability of the farmer's position. One of the reasons is farmers who do not optimally role their marketing function. The rubber auction market is an alternative marketing distribution for farmers to get a more reasonable price with good rubber material quality, with a price transmission elasticity of 2.85. While price changes at the export level are transmitted very little to farmers, farmers' effect is shallow. In the future, farmers need to cooperate in one group of institutions to sell their rubber in considerable quantities to get bargaining power and a fair price.