impact of economic factors changes on paddy farmers

Journal of Economics and Sustainable Development

ISSN 2222-1700 (Paper) ISSN 2222

Vol.4, No.6, 2013

Impact of Economic Factors Changes on Paddy Farmers

Household Income in Lebak Swampland

(Case of Swampland in HSU District, South Kalimantan

Muhammad Fauzi Makki

1 Doctoral Program of Agric

1 Department of Agriculture Economic, University of Lambung Mangkurat , Indonesia.

2,3,4 Department of Agricultural Economic, Uni

* E-mail of the corresponding author

Abstract

Paddy farmer household at Lebak swampland are poor because of low income. Efforts to increase household

paddy farmer’s income in Lebak swampland are alway

and expansion area (extensification

farm household incomes in the Lebak

models, with simultaneous equations. The results showed that the increase in input prices of paddy (seeds,

fertilizers, pesticides and labor outside the family) would decrease farmer household income. The increased of

input price followed by an increased in paddy output price in same proportion were able to increase farm

households income. Seed subsidies are also able to increase the household income. In contrast; paddy area

expansion or extensification would decrease household income. Therefo

lebak swampland is not priority choice.

Keywords: Lebak swamplands; farmer income; extensification; inputs price, price of output

I. INTRODUCTION

Swamplands typology is an alternative area developed to address the needs o

Swampland resources in Indonesia reached 39 million ha, spread across the island of Sumatra, Kalimantan;

Sulawesi and Papua (Noor, 2004). Noor (2007) states one typology that has swamplands is Lebak swamplands.

The land has become one alternative in order to achieve an increase in paddy production as well as to increase

revenue in order to strengthen farm households economy. In fact there are many farmers plant paddy in the lebak

swamplands is poor because of low income, as well

Kalimantan. In this context, the poverty is structural poverty. This can not be solved only with short

solutions, such as direct cash assistance.

Paddy farmers income in Lebak Swamp

caused by natural factors, also vulnerable to changes in input price and output. Theoretically; interventions

commonly performed in rice fields with different typologies, namely rain fed and irrigation to

provision of subsidized inputs especially seed subsidy and expansion policy (

approach is not exactly an attempt to increase farm household income when applied in

Changes in economic factors or external factors include price factor; subsidies and expansion policy

(extensification) has always been an important issue in

is the extent impact of these economic factors changes on household

On the other hand; household swamp

not separate the production aspects to consumption, with the main objective to meet family needs (Ellis, 1988

Mendola, 2007; Kusnadi, 2005; Elly, 2008). Efforts to increase household farmers income is manifested in input

d Sustainable Development

1700 (Paper) ISSN 2222-2855 (Online)

116




Province-Indonesia)

Muhammad Fauzi Makki1*

M. Muslich Mustadjab2 Nuhfil Hanani

3 and Rini Dwiastuti

1 Doctoral Program of Agricultural Economic, University of Brawijaya, Indonesia


2,3,4 Department of Agricultural Economic, University of Brawijaya, Indonesia

mail of the corresponding author: [email protected]

swampland are poor because of low income. Efforts to increase household

swampland are always associated with the economic factor as price; subsidies

extensification). This study aims to analyze the impact of economic factors change on

Lebak swampland. Data is analyzed by using agricultural econo



an increased in paddy output price in same proportion were able to increase farm


expansion or extensification would decrease household income. Therefore, the expansion program option at

swampland is not priority choice.

lands; farmer income; extensification; inputs price, price of output

Swamplands typology is an alternative area developed to address the needs of food, especially paddy.



e one alternative in order to achieve an increase in paddy production as well as to increase


swamplands is poor because of low income, as well as in the District of Hulu Sungai Utara (HSU), South

Kalimantan. In this context, the poverty is structural poverty. This can not be solved only with short

solutions, such as direct cash assistance.

Swampland is not able to meet household needs because of low productivity


commonly performed in rice fields with different typologies, namely rain fed and irrigation to

provision of subsidized inputs especially seed subsidy and expansion policy (extensification

approach is not exactly an attempt to increase farm household income when applied in

rs or external factors include price factor; subsidies and expansion policy

) has always been an important issue in paddy farmers income in Lebak swamp

is the extent impact of these economic factors changes on household paddy farmers income in

swampland paddy farmers in the Lebak is a subsistence farm households. They do

not separate the production aspects to consumption, with the main objective to meet family needs (Ellis, 1988


www.iiste.org




and Rini Dwiastuti4

Brawijaya, Indonesia


versity of Brawijaya, Indonesia

swampland are poor because of low income. Efforts to increase household

s associated with the economic factor as price; subsidies

). This study aims to analyze the impact of economic factors change on

swampland. Data is analyzed by using agricultural economic household



an increased in paddy output price in same proportion were able to increase farm


re, the expansion program option at

lands; farmer income; extensification; inputs price, price of output.

f food, especially paddy.



e one alternative in order to achieve an increase in paddy production as well as to increase


as in the District of Hulu Sungai Utara (HSU), South

Kalimantan. In this context, the poverty is structural poverty. This can not be solved only with short-term

to meet household needs because of low productivity


commonly performed in rice fields with different typologies, namely rain fed and irrigation to increase revenue,

extensification). However, this

approach is not exactly an attempt to increase farm household income when applied in Lebak swamplands.

rs or external factors include price factor; subsidies and expansion policy

swampland. The question

farmers income in Lebak swampland.

is a subsistence farm households. They do

not separate the production aspects to consumption, with the main objective to meet family needs (Ellis, 1988;




Vol.4, No.6, 2013

allocation decision-making behavior and regulation of production in farming management, as well as the

behavior of decision-making related to l

(1988); Sadoulet and Janvry (1995); decision to increase farm households income always associated production

aspects, consumption and manpower allocation. The approach is through agricul

Household economic studies typically use a basic model as originally proposed by Chayanov (Ellis, 1988),

Becker (1965); Gronou (1977), which were further developed by Singh; Squire and Strauss (1986). Economic

behavior of farmers in countryside based on land typology have a particular characteristic, such as

swamplands, becomes important because agriculture still plays an important role in many countries including

Indonesia (OECD, 2003).

Several previous studies associated with

by Abdurrahman (1992) - approached only on production aspects. Various research or other articles relate to

various aspects that becoming research focus but still relevant farm household e

farmers income. The article studied by

(2005) Jean-Paul Chavas; R. Mivhael Petrie and Roth (2005); Dewbre and Mishra (2007); Fariyanti et al

(2007); Fariyanti (2008); Cornejo, et al

Fang Wen-I (2010); and Chi kezie et al

on dry land typology. Therefore, to answer the

farmers income in Lebak swampland to reduce poverty, then this article aims to analyze the impact of economic

factors changes, including: (1) increase in input and output

expansion of paddy plant, each of household farmers income in

Simulations conducted to determine the impact of changes in household rice farmers income in the event of price

changes, subsidies and expansion

production factor inputs simultaneously cover the cost of seeds, fertilizer, pesticides and labor outside the family

of 10%, (b) multiple form simulation increase in total

increase, (c) seed subsidy provision for

II. METHOD

2.1. Data and Procedures

This research uses primary data. Methods for determination of sample farme

sampling. First, Sungai Pandan subdistrict selected purposively. The consideration is the largest area of

crop in HSU district. From this sub districts, it is selected Rantau Karau Hulu Village. The justification

paddy farmers if this village are : (a) diversification in farming other than paddy, particularly in duck and egg

production; as well as fishing business; (b) most farmers work on off

implementing paddy in shallow lebak area (

census on paddy production at Rantau Karau Hulu

of family) in people Rantau Karau Hulu

it is obtained various population census to calculate the number of respondents used in study sample. The

number of the sample is calculated based on formula by

random from farm households in each sub

predetermined based on above equation. Based on this method, it is selected 100 samples of farmers.

This study uses agricultural economic household

specification used are described as follows:



117

making behavior and regulation of production in farming management, as well as the

making related to labor allocation. According to Singh; Squire and Strauss (1986), Ellis


aspects, consumption and manpower allocation. The approach is through agricultural household models.



countryside based on land typology have a particular characteristic, such as

lands, becomes important because agriculture still plays an important role in many countries including

Several previous studies associated with increased paddy farmers income in “Lebak” swamp

approached only on production aspects. Various research or other articles relate to

various aspects that becoming research focus but still relevant farm household economic behavior in relation to

farmers income. The article studied by Sawit (1993); Kusnadi (2005); Cornejo et al (2005); Hendriks and Mishra

Paul Chavas; R. Mivhael Petrie and Roth (2005); Dewbre and Mishra (2007); Fariyanti et al

et al (2007); Cristian and Herne Henningsen (2007);

et al (2011). However, all research and article is motivated by farming is done

on dry land typology. Therefore, to answer the questions above and parallel efforts to increase household

land to reduce poverty, then this article aims to analyze the impact of economic

factors changes, including: (1) increase in input and output paddy price; ( 2) paddy seed subsidy, and (3) the

plant, each of household farmers income in Lebak swampland.


changes, subsidies and expansion of rice land. Simulation was done through: (a) increase in rice price


of 10%, (b) multiple form simulation increase in total paddy production cost by 10 % with 10% rice price

increase, (c) seed subsidy provision for paddy 10%, (d) paddy acreage expansion in the “lebak

This research uses primary data. Methods for determination of sample farmers for primary data are stratified

sampling. First, Sungai Pandan subdistrict selected purposively. The consideration is the largest area of

crop in HSU district. From this sub districts, it is selected Rantau Karau Hulu Village. The justification


production; as well as fishing business; (b) most farmers work on off-farm and non

lebak area (watun I) and middle lebak area (watun II). Firstly, it is conducted a

Rantau Karau Hulu villagers to determine population range. From 314 KK (head

Rantau Karau Hulu villagers; there were 257 KK become paddy farmers. From this census,


number of the sample is calculated based on formula by Parel et al (1973). Samples were taken with purposi

random from farm households in each sub-village (dusun). The goal is to obtain the amount of sample


agricultural economic household model with a simultaneous equations system. Models

specification used are described as follows:

www.iiste.org

making behavior and regulation of production in farming management, as well as the

abor allocation. According to Singh; Squire and Strauss (1986), Ellis


tural household models.



countryside based on land typology have a particular characteristic, such as Lebak

lands, becomes important because agriculture still plays an important role in many countries including

swampland - among others

approached only on production aspects. Various research or other articles relate to

conomic behavior in relation to

(2005); Hendriks and Mishra

Paul Chavas; R. Mivhael Petrie and Roth (2005); Dewbre and Mishra (2007); Fariyanti et al

; Hung-Hao Chang and

. However, all research and article is motivated by farming is done

questions above and parallel efforts to increase household paddy

land to reduce poverty, then this article aims to analyze the impact of economic

seed subsidy, and (3) the


of rice land. Simulation was done through: (a) increase in rice price


ion cost by 10 % with 10% rice price

lebak” area by 25%.

rs for primary data are stratified

sampling. First, Sungai Pandan subdistrict selected purposively. The consideration is the largest area of paddy

crop in HSU district. From this sub districts, it is selected Rantau Karau Hulu Village. The justification is the


farm and non-farm activities, (c)

Firstly, it is conducted a

villagers to determine population range. From 314 KK (head

KK become paddy farmers. From this census,


Samples were taken with purposive

village (dusun). The goal is to obtain the amount of sample


el with a simultaneous equations system. Models



Vol.4, No.6, 2013

Land for Paddy Production in lebak

PTP = a0 + a1 LHP + a2 PBP + a3

The sign and magnitude of the expected pa

Total Use of Labor paddy :

TKP = TKDKP + TKLK ................................

The use of paddy seed

PBP = b0 + b1 HPBP + b2 LHP + b

The sign and magnitude of the expected estimations parameter are:

urea fertilizer usage

PPUR = co + c1 HPUR + c2 LHP + c


Pesticide usage

POP = do + d1 HPOP + d2 LHP + E


paddy input usage value

NPIP = (PBP *HPBP) + (PPUR * HPUR) + (POP * HPOP)

Labor in-household for paddy farming

TKDKP = f0 + f1 TKDKOF + f2 TKDKNF + f


Labor out-household for paddy farming

TKLK = g0 + g1 UTKLK + g


TKDK usage at farming beside rice

TKDKSP = h0 + h1 TKDKP + E


In-household labor usage for off-farm activity

TKDKOF = j0 + j1 UTKDKOF + j


In-household labor usage for off-farm activity

TKDKNF = k0 + k1 UTKDKNF + k


Total labor usage for rice activity with off

TKDKN = TKDKP + TKDKOF

Total farmer labor usage

TPTKP = TKDKP + TKLK + TKDKSP + TKDKOF + TKDKNF

Total cost of paddy farming

TBUTP = (PBP * HPBP) + (PPUR*HPUR) + (POP*HPOP) +

(TKLK*UTKLK) + BTPLL ………..................................................

Paddy farming household income

PUTP = (PTP * HPP) – TBUTP

Non paddy farming household income

PUTSP = i0 + i1 TKDKSP + i2

The sign and magnitude of the expected estimations parameter



118

lebak swampland:

PPUR + a4 TKP + a5 POP + E ....................... …………...[1]

The sign and magnitude of the expected parameter estimations are: a1, a2, a3, a4, a5 > 0

................................................................................. …………...[2]

LHP + b3 TKP + E ………….....................................

the expected estimations parameter are: b2, b3 > 0; b1 < 0

LHP + c3 PNPNGN + E ....................................... …………...[4]

The sign and magnitude of the expected estimations parameter are: C2 > 0; C1, C3

LHP + E .................................................................. …………...[5]

The sign and magnitude of the expected estimations parameter are: d2 > 0; d1, < 0

NPIP = (PBP *HPBP) + (PPUR * HPUR) + (POP * HPOP) ........................... …………...[6]

ing

TKDKNF + f3 TKLK + f4 LHP + E .......................... …………...[7]

The sign and magnitude of the expected estimations parameter are: f1, f3, < 0; f1, f4 > 0

household for paddy farming

UTKLK + g2 TKDKP + g3 LHP + E ......................... …………...[8]

The sign and magnitude of the expected estimations parameter are: g1, g2 < 0; g3 > 0

TKDK usage at farming beside rice

TKDKP + E ................................................................... …………...[9]

The sign and magnitude of the expected estimations parameter are: h1 < 0

farm activity

UTKDKOF + j2 TKDKP + j3 TKDKNF + j4 TKDKSP + E .

The sign and magnitude of the expected estimations parameter are: j2, j3, j4< 0; j1 > 0

rm activity

UTKDKNF + k2 TKDKP + k3 LHP + E ………… .....................

The sign and magnitude of the expected estimations parameter are: k1 > 0; k2, k3 < 0

Total labor usage for rice activity with off-farm activity

TKDKN = TKDKP + TKDKOF ................................................................... ……………..[12]

TPTKP = TKDKP + TKLK + TKDKSP + TKDKOF + TKDKNF ........... ……………..[13]

TBUTP = (PBP * HPBP) + (PPUR*HPUR) + (POP*HPOP) +

(TKLK*UTKLK) + BTPLL ……….................................................................. .......................

TBUTP ...................................................................... ……………..[15]

Non paddy farming household income

LHP ………………………………………………..

The sign and magnitude of the expected estimations parameter are: i1 > 0; i2 < 0

www.iiste.org

…………...[1]

> 0

…………...[2]

..........[3]

…………...[4]

< 0

…………...[5]

…………...[6]

…………...[7]

> 0

…………...[8]

…………...[9]

TKDKSP + E . .....[10]

..................... …..[11]

……..[12]

……………..[13]

........................[14]

……………..[15]

LHP ……………………………………………….. ......[16]



Vol.4, No.6, 2013

Total income from on-farm activity

PTOF = PUTP + PUTSP ................................

Household income from off-farm activity

PKOF = l0 + l1 TKDKN + l2

The sign and magnitude of the expected estimations para

Household income from non-farm activity

PKNF = m0 + m1 TKDKU + m2


Total use of labor to off-farm activities with non

TKDKU = TKDKNF + TKDKOF

Paddy farmer household income

PRT = PTOF + PKOF + PKNF

Farmer household expenditure for food consumption

PPNGN = n0 + n1 AKPP + n2


Farmer household expenditure for non food

PNPNGN = p0 + p1 AKPP + p2


Farmer household expenditure for health

PGNKS = q0 + q1 AKPP + q2 PRT + E


Farmer household expenditure for education

PGNPD = r0 + r1 AKPPS + r2


Farmer household expenditure for food and non food consumption

PKONS = PPNGN + PNPNGN ................................

Total farmer household expenditure

PGNRT = PKONS + PGNKS + PGNPD

Saving

TAB = PRT - PGNRT ................................

Note :

PTP = total paddy production (tons)

LHP = land area for paddy (ha)

PBP = paddy seed usage (kg)

Scene = Total labor use for paddy (HKO)

TKDKP = In-household labor usage for paddy (HKO)

TKLK = Out-household labor usage from outside the family for rice (HKO)

HPBP = Price of paddy seeds (Rp / kg)

HPUR = Price of fertilizer (Rp / kg)

PNPNGN = farm household expenditure for non

POP = Use of pesticide (liters)

HPOP = Price of pesticide (Rp /liter)

NPIP = Total value of input use (Rp)



119

farm activity

............................................................................. ……………..[17]

farm activity

UTKDKOF + l3 LHP + E .............................. ……………..[18]

The sign and magnitude of the expected estimations parameter are: l1, l2 >0; l3<0

farm activity

UTKDKNF + E ..................................... ……………..[19]

The sign and magnitude of the expected estimations parameter are: m1, m2 > 0

farm activities with non-farm activities

TKDKU = TKDKNF + TKDKOF .............................................................. ……………..[20]

PRT = PTOF + PKOF + PKNF ............................................................. ……………..[21]

Farmer household expenditure for food consumption

2 PRT + E ................................................ ……………..[22]

of the expected estimations parameter are: n1, n2 > 0

Farmer household expenditure for non food

PRT + E ................................................ ……………..[23]

The sign and magnitude of the expected estimations parameter are: p1, p2 > 0

nditure for health

PRT + E .......................................................... ……………..[24]

The sign and magnitude of the expected estimations parameter are: q1, q2 > 0

Farmer household expenditure for education

2 PRT + E ............................................. ……………..[25]

gn and magnitude of the expected estimations parameter are: r1, r2 > 0

Farmer household expenditure for food and non food consumption

............................................................................ ……………..[26]

Total farmer household expenditure

PGNRT = PKONS + PGNKS + PGNPD ....................................... …………….

............................................................................... ……………..[28]

= total paddy production (tons)

land area for paddy (ha)

= paddy seed usage (kg)

= Total labor use for paddy (HKO)

household labor usage for paddy (HKO)

household labor usage from outside the family for rice (HKO)

= Price of paddy seeds (Rp / kg)

= Price of fertilizer (Rp / kg)

= farm household expenditure for non-food consumption (Rp)

= Use of pesticide (liters)

e of pesticide (Rp /liter)

= Total value of input use (Rp)

www.iiste.org

……………..[17]

……………..[18]

……………..[19]

……………..[20]

……………..[21]

……………..[22]

……………..[23]

……………..[24]

……………..[25]

……………..[26]

……………..[27]

……………..[28]



Vol.4, No.6, 2013

TKDKSP = In-household labor usage for other than paddy (HKO)

TKDKOF = In-household labor usage for off

TKDKNF = In-household labor usage for non

UTKLK = labor wage for out

UTKDKOF = labor wage for off

UTKDKNF = labor wage for non

TBUTP = Total cost of rice farming (Rp)

PUTP = income from rice farming households (Rp)

HPP = Price of paddy output (Rp / kg)

PUTSP = farm income than paddy (Rp)

PTOF = total income on farm / paddy farming+ besides paddy farming (RP)

PKOF = family income off

PKNF = family income non

PRT = Total household income (Rp)

PPNGN = farmer household expenditure on food (Rp)

PGNKS = farmer household expenditure on health (RP)

PGNPD = farmer household expenditure on education (Rp)

AKPP = Paddy farmer family (soul)

PKONS = Expenditure on food and non

AKPPS = Paddy farmer family members who are still in school (soul)

PGNRT = Total household expenditure (RP)

2.3. Estimation and Simulation

Model identification shows that economic model of rice farmers household in

over-identified. Therefore, this research model estimation using 2SLS (Two Stage Least Squares).

validation aims to analyze the extent models are built to represent the real world. In this research, statistical

criteria for validation of value estimat

Means Squares Percent Error (RMSPE) and Theil's Inequality Coefficient. The results of model prediction is

considered appropriate or feasible as a base simulation if the value of RMSPE and

to zero.

Simulations conducted to determine the impact of rice farmer household income changes, when the price or

other policy changes. Simulation was done through: (

simultaneously to cover the cost of seeds, fertilizer, pesticides and labor outside the family (TKLK), respectively

10%, (b) multiple simulation the increases 10% for total cost rice farming with

the provision of subsidies for paddy

III. RESULTS AND DISCUSSION

3.1. General variability Econometrics Model Results

The empirical results of estimation model in this study is good. All exogenous variables included in th

model has a sign in accordance with the parameters and logical theory. Statistical criteria used in evaluating the

prediction is quite good. From 16 behavioral equations, most equations indicate adjusted R

more than 67%. Generally, in simultaneous equations, this suggests that exogenous variables included in the

structural equation model was able to explain endogen variance of each variable. The value test statistic F is

generally high, there are 12 equations of 16 equations that have F count value greater than 10.3; meaning



120

household labor usage for other than paddy (HKO)

household labor usage for off-farm activities (HKO)

household labor usage for non-farm activities (HKO)

= labor wage for out-household (Rp / HKO)

= labor wage for off-farm activities (Rp / HKO)

= labor wage for non-farm activities (Rp / HKO)

= Total cost of rice farming (Rp)

= income from rice farming households (Rp)

= Price of paddy output (Rp / kg)

= farm income than paddy (Rp)

= total income on farm / paddy farming+ besides paddy farming (RP)

= family income off-farm activities (Rp)

= family income non-farm activities (Rp)

usehold income (Rp)

= farmer household expenditure on food (Rp)

= farmer household expenditure on health (RP)

= farmer household expenditure on education (Rp)

= Paddy farmer family (soul)

= Expenditure on food and non-food consumption (RP)

= Paddy farmer family members who are still in school (soul)

= Total household expenditure (RP)

Model identification shows that economic model of rice farmers household in

identified. Therefore, this research model estimation using 2SLS (Two Stage Least Squares).


criteria for validation of value estimation econometric model is the Root Means Squares Error (RMSE), Root


considered appropriate or feasible as a base simulation if the value of RMSPE and U-Theil get smaller or close


other policy changes. Simulation was done through: (a) increase in the paddy production factor inputs price

taneously to cover the cost of seeds, fertilizer, pesticides and labor outside the family (TKLK), respectively

) multiple simulation the increases 10% for total cost rice farming with paddy price increase of 10%, (

seed; and (d) 25 % expansion of paddy acreage in

III. RESULTS AND DISCUSSION

3.1. General variability Econometrics Model Results

The empirical results of estimation model in this study is good. All exogenous variables included in th


prediction is quite good. From 16 behavioral equations, most equations indicate adjusted R



are 12 equations of 16 equations that have F count value greater than 10.3; meaning

www.iiste.org

Model identification shows that economic model of rice farmers household in lebak swampland is

identified. Therefore, this research model estimation using 2SLS (Two Stage Least Squares). Model


ion econometric model is the Root Means Squares Error (RMSE), Root


Theil get smaller or close


production factor inputs price

taneously to cover the cost of seeds, fertilizer, pesticides and labor outside the family (TKLK), respectively

price increase of 10%, (c)

acreage in lebak swampland

The empirical results of estimation model in this study is good. All exogenous variables included in the structural


prediction is quite good. From 16 behavioral equations, most equations indicate adjusted R2 values above 0.67 or



are 12 equations of 16 equations that have F count value greater than 10.3; meaning



Vol.4, No.6, 2013

variation explanatory variables in each equation is jointly able to explain the variation of endogenous variable

Results structural equation estimation for input demand s

seeds; urea fertilizer, pesticides and wages TKLK, has a negative sign. This indicates that input price is an

important factor in input use decision

(2007); and Hung and Fang (2010). Estimating input demand equation, both equations to use paddy seeds,

fertilizer urea, pesticides and TKLK, also significantly affected by land area, with a positive sign. This implies

that an increase in the use of land requires more input factors.

In equation of rice production estimation; seeds, fertilizer, pesticides and labor usage have a positive sign. The

seeds and fertilizers usage have significant effect on paddy production. This suggests the use

including the price factor, to be one important factor in decision making.

The results of family labor estimation for

off-farm activities and employment outside the fam

indicates that addition of paddy farming land is always dependent on labor availability in family. Conversely,

there is a trade off between non-farm labor TKLK with family labor for

labor to be enlarged, it will reduce the labor for paddy farming. Reduced labor for

TKLK for certain activities that are urgent, such as planting and harvesting. This is similar to the opinion

et al (2005).

The results of labor out-household estimation for

influenced by the positive sign of land wide. The increase in labor wage of out

labor force allocation although relatively small though. This is consistent with studies Sawit (1993) and Fukui

al (2004), the wages have a negative impact on labor usage. Conversely, the land area increase will increase the

amount out-household labor. In paddy

harvesting, due to urgent nature of the activity.

3.2. Impact of paddy input factors price

The increase 10% for paddy price input (seeds, fertilizers, pesticides and wages TKLK) affect the PUTP of

-7.61%. In addition to the decline of the PUTP, the increase in input prices also have an impact on the decline in

farm income other than paddy about

household income (PKNF) also decreased

farmer household income (PRT) at lebak

paddy production cost is 10%, as shown in Figure

Figure 1. Income change compar

-8.00

-6.00

-4.00

-2.00

0.00

%



121


Results structural equation estimation for input demand showed the input prices, including the price of paddy


important factor in input use decision-making. These results are consistent with Kusnadi (200

(2010). Estimating input demand equation, both equations to use paddy seeds,


the use of land requires more input factors.


seeds and fertilizers usage have significant effect on paddy production. This suggests the use

including the price factor, to be one important factor in decision making.

The results of family labor estimation for paddy affected by land usage, with a positive sign. The labor usage for

farm activities and employment outside the family has a negative sign. The reality in

farming land is always dependent on labor availability in family. Conversely,

farm labor TKLK with family labor for paddy. This means

labor to be enlarged, it will reduce the labor for paddy farming. Reduced labor for paddy

TKLK for certain activities that are urgent, such as planting and harvesting. This is similar to the opinion

household estimation for paddy; besides negatively affected by the wages, are also

influenced by the positive sign of land wide. The increase in labor wage of out-household likely decrease the

ugh relatively small though. This is consistent with studies Sawit (1993) and Fukui

(2004), the wages have a negative impact on labor usage. Conversely, the land area increase will increase the

paddy farming at lebak swampland, out-household labor is used in planting and

harvesting, due to urgent nature of the activity.

input factors price

price input (seeds, fertilizers, pesticides and wages TKLK) affect the PUTP of

1%. In addition to the decline of the PUTP, the increase in input prices also have an impact on the decline in

about -0.223%; off-farm households income (PKOF) of

household income (PKNF) also decreased -0.208%. The increase of input prices is evidently lowering

lebak swampland of -2.44%. Income change comparison due the increase in

production cost is 10%, as shown in Figure 1

. Income change comparison due to increased 10% cost of paddy farming

8.00

6.00

4.00

2.00

0.00PUTP

PUTSP

PTOF

PKOF

PKNF

PRT

www.iiste.org


howed the input prices, including the price of paddy


making. These results are consistent with Kusnadi (2005); Asmarantaka

(2010). Estimating input demand equation, both equations to use paddy seeds,



seeds and fertilizers usage have significant effect on paddy production. This suggests the use of both inputs,

affected by land usage, with a positive sign. The labor usage for

ily has a negative sign. The reality in lebak swamplands

farming land is always dependent on labor availability in family. Conversely,

. This means that if the non-farm

will increase the use of

TKLK for certain activities that are urgent, such as planting and harvesting. This is similar to the opinion Blanc

; besides negatively affected by the wages, are also

household likely decrease the

ugh relatively small though. This is consistent with studies Sawit (1993) and Fukui et

(2004), the wages have a negative impact on labor usage. Conversely, the land area increase will increase the

household labor is used in planting and

price input (seeds, fertilizers, pesticides and wages TKLK) affect the PUTP of

1%. In addition to the decline of the PUTP, the increase in input prices also have an impact on the decline in

of -1.018% and non-farm

208%. The increase of input prices is evidently lowering paddy

2.44%. Income change comparison due the increase in

farming



Vol.4, No.6, 2013

3.3. The impact of an input price increase to

Multiple simulations, 10% increase in output price with 10% increase in

impact on input use and income, both farm income (PUTP) and the household farmers income (PRT). The

increase in total cost of paddy farming 10%, with a 10% increase in

seed usage of -3.88%, the decrease in urea usage of

-13.79% for TKLK. But despite this decline, the impact on

2.52%. The impact of increased costs to

PUTSP (-0.223%); PKOF (-1.0185) and PKNF (

with the increase 10% in paddy

Income change comparison are shown i

Figure 2. Income change comparison due to 10% cost increased cost

3.4. Impact of paddy seed subsidy

Input prices for paddy crops tend to increase along with the increase of inflation and economic conditions

changes, both locally, regionally and nationally. This will put pressure

the other hand, paddy production level increasingly erratic due to climate change, increasing the pressure on

farmer household incomes, especially t

have been executed but not yet holistic is seeds subsidy. The simulation results showed that seed subsidy can be

lowered total cost of -17.05%. This cost reduction impact on the increase

12.028%; and PTOF 5.45%. Overall

3.53%. Income change comparison of seed subsidy provision is shown by figure

Figure 3. Income change compariso

3.5. Impact of Paddy Extensification

Extensification of paddy acreage by 25%, assuming the input and output prices of paddy is constant, will

increase the usage of paddy seeds

-2.00

-1.00

0.00

1.00

2.00

3.00

PUTP

%

0.00

5.00

10.00

15.00

%



122

3.3. The impact of an input price increase to paddy output price in the same proportion

Multiple simulations, 10% increase in output price with 10% increase in paddy prices, intended to predict the

input use and income, both farm income (PUTP) and the household farmers income (PRT). The

farming 10%, with a 10% increase in paddy prices, affect to a decrease in

3.88%, the decrease in urea usage of -35.97%, the decrease of pesticide

TKLK. But despite this decline, the impact on paddy farming income (PUTP) remain positive, up to

2.52%. The impact of increased costs to paddy price with increase output price

1.0185) and PKNF (-0.208%). The increase 10% in total cost of

prices was still able to increase the farm households income (PRT) 0.54%.

are shown in Figure 2.

Figure 2. Income change comparison due to 10% cost increased cost and 10% paddy price increase

crops tend to increase along with the increase of inflation and economic conditions

ges, both locally, regionally and nationally. This will put pressure on farmer household income levels. On

production level increasingly erratic due to climate change, increasing the pressure on

farmer household incomes, especially those from paddy farming. One of the government's policy options that


17.05%. This cost reduction impact on the increase of farmer farming income (PUTP) of

12.028%; and PTOF 5.45%. Overall paddy seed subsidy would increase the farmer household income (PRT) of

3.53%. Income change comparison of seed subsidy provision is shown by figure 3.

Figure 3. Income change comparison of seed subsidy

Extensification


(PBP) 5.74%, urea fertilizer (PPUR) 1.42% and pesticides

PUTP PUTSP PTOF PKOF PKNF PRT

PUTP

PUTSP

PTOF

PKOF

PKNF

PRT

0.00

5.00

10.00

15.00 PUTP

PUTSP

PTOF

PKOF

PKNF

PRT

www.iiste.org

output price in the same proportion

prices, intended to predict the

input use and income, both farm income (PUTP) and the household farmers income (PRT). The

prices, affect to a decrease in paddy

35.97%, the decrease of pesticide use of -11.35% and

farming income (PUTP) remain positive, up to

with increase output price apparently lowering

208%). The increase 10% in total cost of paddy farming

prices was still able to increase the farm households income (PRT) 0.54%.

and 10% paddy price increase

crops tend to increase along with the increase of inflation and economic conditions

on farmer household income levels. On

production level increasingly erratic due to climate change, increasing the pressure on

farming. One of the government's policy options that


of farmer farming income (PUTP) of

seed subsidy would increase the farmer household income (PRT) of


and pesticides (POP) 1.29%.



Vol.4, No.6, 2013

The increase usage of inputs result the increase input

farming –TBUTP- (include wages of TKLK) of 10.98%. Comparison between changes in input use, changes in

value of inputs usage and changes in total cost of paddy production due to an increase the total area of

crops in “lebak” area by 25% are shown in Figure

Figure 4. Comparison the changes of input use and cost due to 25 % paddy

Not only inputs utilization, but vast areas of arable land expansion also affects labor usage. The labor usage in

the family (TKDKP) should be added as an increase of 24.32%. Similarly, the use TKLK will increase 29.36%.

Therefore, the labor usage for paddy

the amount of other labor than paddy

(TKDKOF) of -12.78% and a reduction in labor for non

comparison due the increase in total area of

5.

Figure 5. Farm labor change comparison due 25 % paddy land incre

The usage change of labor and input due to increased acreage of pa

income. Therefore, it make paddy farmer income (PUTP) increased by 30.19%. In contrast, income from

off-farm activities (PKOF) decreased by

-10.83%. Overall, the expansion of paddy

There are two important causes of decline in rice farmers household income in lebak swampland, namely: (1)

increase the use of paddy farming inputs adding to

labor usage due to the expansion of rice farming with increase labor for

the labor usage in other activities. This suitable research proposed by Phimister a

TKDK compensation is limited then add TKLK or leave the non

expansion is also difficult to realize because in irrigation addition in

0.00

5.00

10.00

15.00

%

-20.00

-10.00

0.00

10.00

20.00

30.00

%



123

The increase usage of inputs result the increase input (NPIP) of 3.13% and also increase the total cost of paddy

(include wages of TKLK) of 10.98%. Comparison between changes in input use, changes in

anges in total cost of paddy production due to an increase the total area of

crops in “lebak” area by 25% are shown in Figure 4.

Figure 4. Comparison the changes of input use and cost due to 25 % paddy land wide increase

ion, but vast areas of arable land expansion also affects labor usage. The labor usage in


paddy (TKP) increased by 24.84%. Conversely, an increase TKDKP should reduce

paddy farming (TKDKSP) of -14.16%, reduction in labor for off

12.78% and a reduction in labor for non- farm (TKDKNF) of -19.15%. Farm labor chang

comparison due the increase in total area of paddy crops in lebak swampland area by 25% is shown in figure

. Farm labor change comparison due 25 % paddy land increa

The usage change of labor and input due to increased acreage of paddy plants have positive impact on farmer


farm activities (PKOF) decreased by -44.19% and income from non-farm activities (PKNF) decreased by

paddy land 25% causes a decrease in farmers household income of


farming inputs adding to production cost, (2) farmers have to compensate the increase

labor usage due to the expansion of rice farming with increase labor for paddy farming activities and/or reduce

the labor usage in other activities. This suitable research proposed by Phimister and Roberts. (2006).

TKDK compensation is limited then add TKLK or leave the non-farm wages are higher

expansion is also difficult to realize because in irrigation addition in Lebak swampland is difficult; too expensive.

0.00

5.00

10.00

15.00

PBP PPUR POP NPIP TBUTP

PBP

PPUR

POP

NPIP

TBUTP

TKDKP

TKDKSP

TKDKOF

TKDKNF

TKLK

TKP

www.iiste.org

of 3.13% and also increase the total cost of paddy

(include wages of TKLK) of 10.98%. Comparison between changes in input use, changes in

anges in total cost of paddy production due to an increase the total area of paddy

land wide increase

ion, but vast areas of arable land expansion also affects labor usage. The labor usage in


84%. Conversely, an increase TKDKP should reduce

14.16%, reduction in labor for off-farm activities

19.15%. Farm labor changes

paddy crops in lebak swampland area by 25% is shown in figure

ased

ddy plants have positive impact on farmer


farm activities (PKNF) decreased by

land 25% causes a decrease in farmers household income of -0.46%.


production cost, (2) farmers have to compensate the increase

farming activities and/or reduce

nd Roberts. (2006). When

farm wages are higher. In addition, the

land is difficult; too expensive.

TBUTP

TKDKP

TKDKSP

TKDKOF

TKDKNF



Vol.4, No.6, 2013

This implies the need for further optimization for on

vegetables, fisheries and livestock in order to increase household incomes of

research by Suparwoto and Waluyo (2009).

farmer household. Yet according to Adewunmi

Zenebe Gebreegziabher (2011); non

implicitly also means strengthening the farm household economy.

increased of farmer household in lebak area by 25% shown in Figure 6.

Figure 6. Income change comparison due to 25 % paddy

IV. CONCLUSION

1. Price of paddy seed, fertilizer and wages TKLK affect input demand and the rising of input price (seeds;

fertilizers; pesticides) would decrease household income of

increase coupled with paddy

household farmer income in

income of paddy farmers requires the input price stability at the farm leve

other hand, paddy price output must be maintained in order not fall or even can increase.

2. Seed subsidies also have positive impact on household income of

policies that have been implemented can be expanded to include more farmers.

3. In paddy farming, as part of on-

swamplands had lower household income. In addition, the expansion is difficult to realize because

difficulty of irrigation and too expensive. Negative impact of expansion on revenue has implications to the

importance to optimize on-farm activities such as diversification other than

fisheries and livestock that household

policy is the most likely alternative to increase farmer incomes in

the expertise that has been owned by the farmers and the land can still be used after

increase farmer household income can also be done through non

non-farm activities likely continue to increase. Income maximization from non

by improving farmer skills and opportunities utilization, not only around the

but covers a larger area. The increase in non

security. It also means to strengthen

References

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-60.00

-40.00

-20.00

0.00

20.00

40.00

%



124

the need for further optimization for on-farm activities such as diversification than

vegetables, fisheries and livestock in order to increase household incomes of paddy farmers. This is in line with

research by Suparwoto and Waluyo (2009). The decline in income from non-farm income was very influential on

farmer household. Yet according to Adewunmi, et al (2011); Pam Zanohogo (2011); and

Zenebe Gebreegziabher (2011); non-farm income increased significantly to sustain house

implicitly also means strengthening the farm household economy. Income change comparison due the acreage

increased of farmer household in lebak area by 25% shown in Figure 6.

Figure 6. Income change comparison due to 25 % paddy land increased

seed, fertilizer and wages TKLK affect input demand and the rising of input price (seeds;

fertilizers; pesticides) would decrease household income of paddy farmers. Adversely, the input price

price output increase in the same proportion was still able to increase

household farmer income in lebak swamplands. Negative impact of higher input price to household

farmers requires the input price stability at the farm level and smooth distribution. On the

price output must be maintained in order not fall or even can increase.

Seed subsidies also have positive impact on household income of paddy farmers. Therefore, seed subsidies

lemented can be expanded to include more farmers.

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farm activities such as diversification other than paddy

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policy is the most likely alternative to increase farmer incomes in Lebak swamplands at on

the expertise that has been owned by the farmers and the land can still be used after pa

increase farmer household income can also be done through non-farm activities. Moreover, wages level in

farm activities likely continue to increase. Income maximization from non-farm activities can be done

ills and opportunities utilization, not only around the lebak

but covers a larger area. The increase in non-farm income is significant to sustain farmer household food

security. It also means to strengthen the farm household economy.

Analysis of paddy in lebak swampland of Hulu Sungai Utara District

60.00

40.00

20.00

0.00

20.00

40.00

PUTP

PUTSP

PTOF

PKOF

PKNF

PRT

www.iiste.org

farm activities such as diversification than paddy such as

farmers. This is in line with

farm income was very influential on

; Pam Zanohogo (2011); and Bereket Zerai and

farm income increased significantly to sustain household food security. It is

Income change comparison due the acreage

land increased

seed, fertilizer and wages TKLK affect input demand and the rising of input price (seeds;

farmers. Adversely, the input price

price output increase in the same proportion was still able to increase

lands. Negative impact of higher input price to household

l and smooth distribution. On the

price output must be maintained in order not fall or even can increase.

farmers. Therefore, seed subsidies

extensification) in Lebak

lands had lower household income. In addition, the expansion is difficult to realize because of the


paddy such as vegetables,

land. Farm diversification

lands at on-farm level due

paddy harvest. Efforts to

farm activities. Moreover, wages level in

farm activities can be done

swampland area alone

farm income is significant to sustain farmer household food

in lebak swampland of Hulu Sungai Utara District - South



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impact of economic factors changes on paddy farmers

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