Marselina Djayasinga Academic of FEB Universitas Lampung
AS a province that grows and develops from agriculture, Lampung should prioritize its development goals in improving the welfare of farmers. One of the measurement tools to see the level of welfare is through the farmer exchange rate (NTP).
NTP is calculated from the ratio of prices received by farmers to prices paid by farmers. The concept simply describes the purchasing power of the income earned by farmers. NTP can be interpreted as the ratio between the revenue from agricultural commodities that farmers can sell and the costs incurred to produce these commodities.
We can see the level of farm profitability from NTP. When the rate is decreasing, it means the increase in agricultural products price by farmers is smaller than the increase in purchased price. When NTP decreases, it indicates the decline in the level of welfare.
Based one Indonesian Central Bureau of Statistics (BPS) per May 2020, NTP in Lampung fell 1.60%, which is to 91.51, while it was still 110.70 in March 2020. From 34 provinces in Indonesia, there are 10 provinces where the NTP increased and 24 provinces decreased, including Lampung.
NTP is formed from several subsectors such as NTP of paddy and secondary crops, NTP of horticulture, NTP of plantations, NTP of livestock, NTP of fisheries, and NTP of aquaculture. NTP of rice and secondary crops, livestock, and fisheries in Lampung declined significantly on May 2020 compared to those in March 2020. Meanwhile, horticulture, smallholder plantations, and aquaculture increased from 94.95 to 100.26.
If we look at the types of commodities, the price of grain, corn, cayenne pepper, green chili, red chili, several types of vegetables and medicinal plants as well as chickens, ducks, goats, and cows have decreased. This is because the public demand for these products decreasing during the pandemic.
So far, Lampung’s biggest agricultural product markets for chili, corn, vegetables, fish, meat, etc. are restaurants, hotels, restaurants, and food stalls in accordance with Lampung’s economic structure which supported by the food processing industry and trade.
While smallholder commodities such as coffee, pepper, oil palm, rubber, pineapple, etc. are an input for the process industry and export commodities. All of export destinations are still locked down during this pandemic. People with low purchasing power and poor families with a high enough number, which is 12%, have lost their informal jobs and income.
Declining in purchases of agricultural products and number of visits to the restaurants, and cafes were caused by the pandemic. As a result, most of the main markets for farmers such as restaurants and hotels are closed.
These low-purchasing societies, coupled with poverty in Lampung, which is quite high by 12%, have lost their informal works and income.
NTP of the subsector of the plantation is also declined because export activity decreased due to a pandemic. The types of plantation crops such as rubber, coffee, palm oil, catch fish, etc. are the first-rate export products of Lampung. When the whole world goes into a lockdown policy, the commodity exporters decline significantly.
NTP in Lampung is declining because the farmers have a low bargaining position. Farmers can only accept market decisions and cannot be involved in determining prices. The low bargaining position also related to the long-lasting nature of agricultural commodities.
In practice, many large traders “play” the prices by pressing it. Another factor that makes the bargaining position is weak because harvest time happens at the same time, resulting in oversupply which causes prices to fall.
Why does this happen? It is because there is no good crop management. Farmers are left to walk alone with their instincts so that they plant and harvest at the same time. The role of agricultural experts or agricultural extension is needed to socialize this management.
Another factor causing the decline is because the purchasing power is low. This means the income from agricultural commodities is still below the price of non-agriculture because the demand for agricultural commodities decreases.
To get exist in this market, farmers can work together with online transportation services for delivering their product and they must open a bank account so that consumers can transfer the costs they have to pay.
In order to satisfy the customer, farmers must be able to maintain the quality of their agricultural commodities, for example by attractive and hygienic packaging. Consumers will not mind if the price is a little bit expensive as long as the products are still fresh, healthy, and ready to deliver.
The Role of the Government
Local governments or related parties can do something to improve the welfare of farmers such as marketing. They can provide marketing training to farmers using online marketing techniques.
The local government can also help with capital to farmers, especially for the purchase of seeds and seeds, seed assistance, etc. Guaranteed availability of fertilizer at subsidized and affordable prices needed by farmers. Farmers also need income assistance to maintain their lives during the planting period waiting for the harvest. Farmers are often trapped with moneylenders when waiting for the harvest.
The local government can also help the farmer in business capital, especially for purchasing seeds, agricultural machinery (alsintan), assistance, etc. The farmers need a guarantee for the availability of fertilizer at subsidized and affordable prices. They also need income assistance to maintain their lives during the planting period because they are often trapped with moneylenders while waiting for harvest time.
Local governments must be present as well among farmers when agricultural commodity prices drop. Optimizing the role and function of the Dinas or BUMD as a buffer stock, which is to buy up the excess stock in the market and distribute it to other places so that the price of agricultural commodities remains stable. Local governments can open new markets for farmers by utilizing programs to help others.
Local governments can help in the post-harvest handling stage as well, such as making cold storage. Local governments can help create value-added agricultural products to improve product packaging and hygiene, re-function the role of extension staff to help farmers with technical difficulties.
As long as our mutual intention is to help farmers to be independent and successful, we must think clearly and create programs and activities that focus on the issues. If you look at the 33 work programs of Lampung Governor, one of his programs is to realize Petani Lampung Berjaya with Kartu Petani Pintar. This extraordinary program must be immediately realized in concrete activities. []
