Authors:
Heriyanto
1
;
Asrol
1
and
Detri Karya
2
Affiliations:
1
Department of Agribusiness, Faculty of Agricultural, Universitas Islam Riau, Pekanbaru, Indonesia
;
2
Department of Management, Faculty of Economics, Universitas Islam Riau, Pekanbaru, Indonesia, Indonesia
Keyword(s):
Impact, Economic Decisions, Coconut Farmer Households.
Abstract:
Coconut farming is the main livelihood of the majority of households in Indragiri Hilir. Although the penetration of oil palm plantations has entered the region, the existence of palm, coconut smallholders, in particular, is still maintained. In order to maintain the existence of the coconut as a commodity with a great contribution to the economy Indragiri Hilir, it is necessary to alignments economic policy. This study was conducted with the aim of analyzing the impact of economic policies on household economic decisions coconut farmers associated with the production, allocation of working time, income, consumption, and investment. Simultaneous equations econometric approach with two stages least square method (2SLS) was used to answer the research objectives. The result of the analysis showed that the increase in coconut prices and the hired labor in coconut farming impact contrary to the policy of increasing wages. Increasing
the price of coconut and the use of hired labor a posit
ive impact on farm household economy in terms of increased production, income, household consumption, and investment, but a negative impact on the allocation of working time. Meanwhile, wage increases have a negative impact on production, income, consumption and business investment, but a negative impact on the allocation of working time. Therefore, the policy of increasing the price of coconut through the government’s efforts to encourage an increase in the price of coconut through the coconut pricing policies or to realize the strong bargaining position of farmers against market structures tend to be oligopsony needs to be done. In addition, it is also necessary to encourage
household persuasive farmers to be more focused on making coconut farming by allocating more time working on his coconut farm.
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