Analysis of Contract Farming Partnership for Sustainable Supply of Tobacco (a Case Study on the Integrated Production System Program of PT. HM Sampoerna Tbk. - Indonesia)

  • Authors

    • Kartika DS Susilowati
    • Asminah Rachmi
    • Nur Indah Riwajanti
    2018-10-07
    https://doi.org/10.14419/ijet.v7i4.15.22993
  • partnership, contract farming program, tobacco, PT. HM Sampoerna Tbk Indonesia

  • This study explored the implementation of the integrated production system program established by PT. HM Sampoerna Tbk Indonesia, a leading Indonesian tobacco company, and examined its potential and constraints. The program was intended to develop cooperation between the company and its tobacco suppliers to get a sustainable supply of tobacco from farmers with quantity, quality and price set according to the company’s standards. This study employed an interpretive research design, following a post-positivist paradigm. The data were collected by means of in-depth interviews, observation and document study and were analyzed using the key tenet of Martin Heidegger’s interpretive phenomenology. The interpretive process was achieved through hermeneutic circle to understand how individuals involved in the program interpreted the program including their own experiences as well as their interactions with other parties. The results of the study indicated that the created contract farming partnership was capable of providing the company with a sustainable supply of tobacco and increasing its production volume. Nevertheless, it was unable to improve the quality of the farmers’ lives as it was chiefly intended to meet the company’s commercial needs. The results from the study have direct relevance to policy makers in Indonesia, especially those that have been implemented contract farming and to agribusiness companies seeking contractual relationships for commodity production.

     

     

     

  • References

    1. [1] Andri, Kuntoro Boga & Shiratake, Y. (2005), Empirical Study of Contract Farming System Conducted by Dairy Cooperatives in East Java, Indonesia. Review of Agricultural Economics Journal Edited by the Kyushu Society of Agricultural Economics Vol. 55, No.2, 2005, pp. 73â€8.

      [2] Badan Pusat Statistik. 2013. Pertumbuhan Ekonomi di Indonesia. Press Release. No. 14/02/Th. XVI, 5 Februari 2013

      [3] Daryanto, Arief (2015). Partnering for Smallholder Inclusive Agricultural Development Models in Indonesia: Lessons from Dairy Industry Development Models in Indonesia, Working Paper presented at Workshop on “Developing Smallholder Inclusive Value Chain Models for Local and Global Markets†8-9th December 2015, Hanoi -Vietnam

      [4] Eaton, Charles & Shepherd, Andrew W. (2001). Contract Farming: Partnership for Growth, Food and Agrilculture Organization Services Bulletin No. 145, Roma.

      [5] Efrit (2011). Model Kemitraan Contract Farming Pada Agribisnis Hortikultura (Contract Farming Partnership Model in Agribusiness, Jurnal Embrio (4) (1) (6-17).

      [6] Erfit (2011), Analisis Komporatif Kemitraan Contrak Farming dan Noncontrak Farming pada Agribisnis Holtikultura, Jurnal Paradigm Ekonomika, Vol. 01, No. 3, April.

      [7] Furubotn, EG and R Richter. 2000. Institution and Economic Theory. The Contribution of the New Institutional Economics. Ann Arbor. The University of Michigan Press.

      [8] Kaur, Bisant; Kamarulzaman, Nitty Hirawaty and Hamzah, Nur Amalina (2015). The Impact of Public-Assisted contract Farming Programmes in Malaysia, Jurnal of Agribusiness Marketing

      [9] Kementerian Pertanian (2017). Kebijakan Pengembangan Tembakau Nasional, Jakarta, www.pertanian.go.id

      [10] Martius, Endry (2008). Kemitraan Agribisnis Untuk Memberdayakan Ekonomi Rakyat, dalam Jurnal Agribisnis Kerakyatan, Vol. 1, No. 1.

      [11] Minot N. 1999. Effect of Transaction Costs on Supply Response and Marketed Surplus: Simulations Using Non-Separable Household Models. MSSD Discussion Paper No. 36. International Food Policy Research Institute. Washington, DC.

      [12] Nagaraj, N., Chandrakanth, M. G., Chengappa, P. G., Roopa, H. S., & Chandakavate, P. M. (2008). Contract farming and its implications for input-supply, linkages between markets and farmers in Karnataka. Agricultural Economics Research Review, 21, 307-316.

      [13] Priyanti, Atien & Soedjana, TD (2015). Indonesian Dairy Industry Perspectivewithin the ASEAN Economic Community, WARTAZOA Vol. 25, No. 4, pp. 159-170 DOI: http://dx.doi.org/10.14334/wartazoa.v25i4.122.

      [14] Prowse, Martin (2007). Making Contract Farming Work with Cooperatives, ODI Opinion 87, ODI, London, UK.

      [15] Saptana, Sunarsih & Indraningsih, Kurnia Suci (2006). Mewujudkan Keuanggulan Komparatif Menjadi Keunggulan Kompetitif Melalui Pengembangan Kemitraan Usaha Hortikultura, Forum Penelitian Agro

      [16] Setboonsarng, Sununtar (2008). Global Partnership in Poverty Reduction: Contract Farming and Regional Cooperation. ADBI Discussion Paper 89. Tokyo: Asian Development Bank Institute.Available: http://www.adbi.org/discussionpaper/2008/02/25/2491.global. partnership.poverty.reduction.

      [17] Singh, S. (2002). Contracting out Solutions: Political Economy of Contract Farming in the Indian Punjab, World Development, 30 (9), 1621-1638.

      [18] Sulistiyani, Ambar Teguh (2004) Kemitraan dan Model–Model Pemberdayaan. Yogyakarta, Penerbit Gaya Media.

      [19] Widiyanto,. Suwarto dan Setyowati, R,. (2010). Dinamika Nafkah Rumahtangga Petani Pedesaan Dengan Pendekatan Sustainable Livelihod Approach (SLA). Jurnal Transdisiplin Sosiologi, Komunikasi dan Ekologi Manusia 28(2).

      [20] Will, Margret (2013). Contract Farming Handbook, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, Zimbabwe.

      [21] Williamson OE. 2000. The New Institutional Economics: Taking Stock, Looking Ahead. Journal of Economic Literature,38:-651935

      [22] http://www.sjdih.depkeu.go.id/fulltext/1995/9TAHUN~1995UU.htm

      [23] Yuska, Nofri,. 2014. Kepentingan Indonesia Tidak Meratifikasi Framework Convention On Tobacco Control (FCTC). 1(2): Universitas Riau

  • Downloads

  • How to Cite

    DS Susilowati, K., Rachmi, A., & Indah Riwajanti, N. (2018). Analysis of Contract Farming Partnership for Sustainable Supply of Tobacco (a Case Study on the Integrated Production System Program of PT. HM Sampoerna Tbk. - Indonesia). International Journal of Engineering & Technology, 7(4.15), 219-223. https://doi.org/10.14419/ijet.v7i4.15.22993