Journal of Indonesian Economy and Business
Vol 25, No 1 (2010): January

THE IMPACT OF CONTRACT FARMING ON THE PROFIT OF VIRGINIA TOBACCO FARMING IN LOMBOK ISLAND, WEST NUSA TENGGARA

Hamidi, Hirwan ( Universitas Mataram, Lombok-Indonesia)



Article Info

Publish Date
28 Feb 2015

Abstract

This study aims at explaining the impact of contract farming on the profit of Virginia tobacco farming in Lombok Island. Does partnership influence profit? We used surveydata of 147 farmers, they are partners of tobacco processors and independent farmers. By utilizing profit function analysis, it is concluded that: (1) partnership positively affected the profit of Virginia tobacco farming in Lombok Island; (2) productivity, prices of tobacco, fertilizers (NPK, KNO), pesticide, kerosene, and labor wage significantly affected the profit. These are followed by: (1) that farmers should reduce the use of human labor, while partner company and local government should endeavor to find alternative technology to substitute human labor with machinery labor; (2) that the government is recommended to continue subsidy provisionof at least for short term program until cheaper alternative fuels, such as coal, solar energy, biomass energy, or others, are available.Keywords: impact, partnership, profit, Virginia tobacco

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Journal Info

Abbrev

Publisher

Subject

Economics, Econometrics & Finance

Description

Journal of Indonesian Economy and Business (JIEB) is open access, peer-reviewed journal whose objectives is to publish original research papers related to the Indonesian economy and business issues. This journal is also dedicated to disseminating the published articles freely for international ...