Banana Cocoa Palm oil

Development for Human Welfare 2016 225 Table 2. The Analysis Result of Leading Commodity LQ in Nunukan District Year Commodity LQ grade Criteria 2013 Peanut 1.308 Basis Cassava 1.822 Basis Sweet potato 1.207 Basis Green beans 1.280 Basis Cocoa 2.104 Basis Palm oil 2.211 Basis Meat 1.552 Basis Dug eggs 1.008 Basis Coastal fisheries and seaweed cultivation 2.217 Basis Resource: secondary data analysis, 2015 Referring to Table 2, leading commodity or basis commodity are including peanuts, cassava, sweet potatoes, green beans, cocoa, palm oil, meat, duck eggs and coastal fisheries and seaweed cultivation. Three commodities which occupy three higher basis commodities are coastal fisheries and seaweed cultivation, palm oil and cocoa. It means that nowadays these eighth of commodities becomes the basis sector or having competitive leading. Besides, commodity that has the higher LQ value becomes the main livelihood of the society in Nunukan district, North Kalimantan. It looks the same like in reality life of the society, that the development of seaweed cultivation at the seas of Nunukan district is developed rapidly. Moreover, Nunukan becomes one of the biggest seaweed producers in Indonesia. Palm oil commodity becomes popular in Nunukan in about five years. It was because there was a policy from the government to plant palm oil in large scale. Cocoa commodity also becomes one of the major commodities in Nunukan. Cocoa has long been cultivated in the community, however now it began to decline as it began replaced by palm oil plantation. This phenomenon results the cocoa production decreased from year to year. The development of leading commodity and another non leading commodity in Nunukan becomes the major part because Nunukan is an area that directly adjacent to other country. Focus Group Discussion FGD Focus Group Discussion FGD was held on June 1, 2015 at the regent office of Nunukan, North Kalimantan. It was attended by representative of regent office, Sebatik district, Agriculture department, fishery, and plantation. All the audiences focus on the discussion to understand more about leading commodity which are need to develop. The result obtained from FGD activities are,

1. Banana

- Potential: Plants that are cultivated by farmers amount to 3,000 hectares because the prices are high and there have been refined products of these commodities. - Obstacle: The marketing of products is still limited due to packaging and certification.

2. Cocoa

- Potential: Almost all of the farmers cultivate cocoa plants and has received assistance from the government in its development. - Obstacle: 1 million of palm oil program make the cocoa plant converted into palm oil plantations and now the cocoa plant are less than palm oil plantations.

3. Palm oil

- Potential: A lot of farmers have planted palm oil by 1 million palm oil cultivation government program, and now the acreage is about 4,000 hectares. - Obstacle: Nowadays, a lot of the farmers convert palm oil into banana because its price is more appropriate. Based on the results of FGD, the commodities that will be developed in Sebatik Island is banana because banana is a plant that is being cultivated by farmers. In addition, the selling price of bananas is high and there have been refined products of these commodities. Jangkung Handoyo Mulyo, Irham, Hani Perwitasari, Fatkhiyah Rohmah 226 The Strategy of Border Area Development The border region, study of Sebatik Island, is identical as isolated and underdeveloped regions both socially and economically. This condition occurs as a result of their paradigm in managing of border areas as a backyard NKRI area. This paradigm emerged as the political system at the past which centralized and emphasized the security stabilization. As a result, the handling of the border area is dominated by securing the borders area from the potential threaten from the outside external threat view and tend to position the border area as a security belt security belt. The lag of the economy must be pursued to make the people in border areas get thriving and security as they were expected. Based on the analysis of LQ and FGD and supported by previous research, commodity can be developed in Sebatik Island is banana commodity. The development of these border regions can be done through the development of leading commodity with local economic development in form of Community-based Enterprise. In local economic development through the Community- based Enterprise needs a process in which local governments and community- based organizations involved in encouraging, stimulating and maintaining business activities, especially in the utilization of economic potential in each region based each society resources. The strategies can be done in the development of the border region is the Golden Triangle Strategy. In this strategy, there are three main components, namely rural agribusiness, community empowerment and the entrepreneurial community. These three components must be integrated and work together for achieving of a prosperous society. This strategy can be described as follows Figure 1. Golden Triangle Strategy Source: Mulyo and Irham, 2015 Rural agribusiness becomes a major concern because agricultural sector is still and will still be a pillar of the economic development of rural society. Agribusiness area should be developed in rural areas, especially in small and medium scale by utilizing local agricultural products. According to Rijadi 2002 the development of agribusiness in rural area has a strategic role due to some following reasons: first, agribusiness activity has a strong resource base and diverse, and it is also the basis of broad economic activities; second, agribusiness and agro- industry activities are able to increase the value-added products and absorb a lot of labor and relatively easy to control of environmental pollution; Third, the products produce the commodities that are needed to occupy the peoples basic needs as well as export competitively. The next component in this strategy is the empowerment of the people community empowerment. Why should the community empowerment? In the concept of community empowerment is do the economic development that summarizes the social values. According to Chambers 1995 cit. Noor 2011, this concept reflects the new paradigm of development, which is people-centered, participatory, empowering and sustainable. Empowerment is a process and a goal. As a process, empowerment is a series of activities to strengthen the powers or the existence of vulnerable groups in society. Meanwhile as the goal, empowerment refers to the condition or the results to be achieved from a social change. It can be concluded that the community empowerment is the effort Development for Human Welfare 2016 227 made through a series of activities to strengthen the empowerment of vulnerable groups in society in order to achieve a better life. The efforts to empower communities covers three aspects: creating an atmosphere or climate that allows the potential of developing societies enabling, strengthen the potential or the power possessed by the people empowering and preventing competition which is not balanced, and the exploitation of the strong over the weak protecting. Agribusiness rural development should be integrated through community empowerment so that rurallocal economic development will be more focused and the limited resources can be utilized optimally. It is expected the growth disparity area between the border area and non-border area can be reduced, creating productive employment and socio-economic conditions of rural society that is sturdy and can grow independently and sustainably. Agricultural area developmentrural agribusiness through community empowerment will realize the creation of entrepreneur community. Agribusiness can serve as the motor of the rural economy in a sustainable society with active participation of the community. CONCLUSION Based on the results of the research, leading commodity that can be developed by Community Based Enterprise CBE in the Sebatik district is bananas because banana is a plant that is being cultivated by most of farmers. In addition, the selling price of bananas is high and there have been refined products of these commodities. However, the obstacle faced by the marketing of products is due to packaging and certification. Therefore, we need to help the establishment or development of institution, especially in supporting the marketing of banana products. Strategy that can be done in the development of leading commodity in border region is Golden Triangle Strategy through Community-based Enterprise. In this strategy, there are three main components, namely rural agribusiness, community empowerment and the entrepreneurial community. REFERENCES Hendayana, Rachmat. 2003. Aplikasi metode location quotien. Informatika Pertanian 12: 1-20. Kiser, Don. 1992. A location quotient and shift share analysis of regional economies in Texas. Thesis, The Department of Political Sciences, Southwest Texas State University, USA. Kusrini, Novira. 2006. Kajian Neraca Perdagangan antar Negara di Daerah Perbatasan Kalimantan Barat dalam Rangka Peningkatan Nilai Tambah Produk Lokal untuk Ekspor. Proposal Penelitian BPTP Kalimantar Barat dan Bapeda Propinsi Kalimantan Barat. Mulyo, Jangkung Handoyo and Irham. 2015. Pengembangan Industri Agribisnis Berbasis Kerakyatan pada Komoditas Lokal Untuk Ekspor di Daerah Perbatasan Pulau Sebatik Kabupaten Nunukan Kalimantan Utara. Laporan Akhir Kegiatan Penelitian Unggulan Perguruan Tinggi. Ningsih. 2015. Sebatik, Pulau Terluar di Indonesia. http:nantly.mywablog.comsebatik pulau-terluar-di-indonesia.xhtml diakses pada tanggal 6 September 2015. Noor, Munawar. 2011. Pemberdayaan masyarakat. Jurnal Ilmiah CIVIS 1 2. Rijadi, Dedi Masykur. 2002. Pemberdayaan masyarakat melalui pengembangan kawasan agribisnis: Pembangunan pertanian berbasis kewilayahan. Jurnal Perencanaan Pembangunan, April-Juni 2003, No. 31. Bappenas. Jakarta. Jangkung Handoyo Mulyo, Irham, Hani Perwitasari, Fatkhiyah Rohmah 228 Sabran, S., Ramli, R., Utomo, B., Bhrehama, A., and Krinawati, A. 2006. Penentuan komoditas unggulan nasional di Provinsi Kalimantan Tengah dengan menggunakan metode location quotient. Jurnal Pengembangan dan Pengkajian Teknologi Pertanian 91: 1-9. Statistics Indonesia. 2014. Nunukan dalam angka 2014. Statistics Indonesia. Nunukan. Sulisnawati. 2012. Analisis komoditas pertanian unggulan dan wilayah pengembangannya di Kota Banjarbaru. Media SainS 42: 202- 217. Development for Human Welfare 2016 229 DISCUSSION FROM PARALLEL SESSION PAPER TITLE Development Strategy of Leading Commodity Through Community-Based Enterprise in Indonesia-Malaysia Border Area AUTHOR Jangkung Handoyo Mulyo, Irham, Hani Perwitasari, Fatkhiyah Rohmah DISCUSSION QUESTION - In the LQ ..., ... is not ...  is not the basis - Why banana come out in the FGD? ... leading commodity - Price of Palm Oil ... down and now ... is that change the conclution - ... - How far your recomendation for the processing of banana? - Why just one comodity? ANSWER - The data of banana is not known - The processing of banana require sertification like halal, packaging, etc - Because banana is the most in Nunukan SUGGESTION - Table 1 may be correlated RC, gross margin ... - More explantion why banana is not presented in the LQ 230 BUSINESS DEVELOPMENT STRATEGY SOYBEAN SAUCE PRODUCTION IN CAP BAWANG SOY SAUCE COMPANY AT NGAWI REGENCY Feti Munika Sakti 1 , Mohamad Harisudin 1 , Raden Rara Aulia Qonita 1 1 Department of Agribusiness, Faculty of Agriculture, Universitas Sebelas Maret Surakarta Jl. Insinyur Sutami 36 A Kentingan, Surakarta corresponding author: fetimunika.fmgmail.com ABSTRACT This research aims to identify costs, revenues and incomes of Cap Bawang Soy Sauce Company, critical success factors Strengths, Weaknesses, Opportunities and Threats of Cap Bawang Soy Sauce Company, alternative strategies and priority of business development strategies that can be applied to soybean sauce production in Cap Bawang Soy Sauce Company. This research uses descriptive analytical basis. Research locations selected intentionally purposive in Cap Bawang Soy Sauce Company at Ngawi Regency. Determination of the key informant intentionally purposive, the owner and employees of the company, employee Disperindagkop Ngawi, customers, suppliers and resellers of Cap Bawang Soy Sauce. This research uses primary and secondary data. Data analysis techniques use: 1 Analysis of costs, revenues and incomes, 2 IFE and EFE Matrix, 3 Quantitative SWOT Matrix, 4 Qualitative SWOT Matrix, 5 QSPM. The results showed the companys cost in 2015 amounted Rp. 803,803,450.00, the company’s revenues amount to Rp. 924,048,000.00, and the companys incomes Rp. 120,244,550.00. The values of IFE score are 0.7229 and EFE score are 0.8388 is showing the position of Cap Bawang Soy Sauce Company were in the first quadrant on Quantitative SWOT Matrix. Qualitative SWOT Matrix produces several alternative strategies by combining the Strengths and Opportunities of the company. The highest Value TAS Total Attractive Score of QSPM is 6.8271 that is the priority of the strategy to make the diversification of packaging products. Keywords: Development Strategy, Ngawi, QSPM, Soybean Sauce, SWOT INTRODUCTION Indonesia is an agricultural country that has a diversity of agricultural product that can be used by humans to their daily lives. As the times, there is an activity process of agricultural product into a food or foodstuffs that enable people to consume. According to Seto 2001 food is a basic need that very important for every human, both physiologically and psychologically. Soybean is one of the agricultural products in Indonesia which can be processed into food or foodstuffs. According to Cahyadi 2012 it is good to consume soybean because it has a complete chemical content. Soy sauce is a product of soybeans that produced by agroindustry. The color of these products usually are black and their packing are plastic or bottles. According Kotler 2006 every company must implement product development to shape the future of the company. Customers always want new products with changes such as the specific characteristics of products, improve product quality, increase product type, and change the size of the product to sufficient needs and desires of customers if they do not want the company that manages decline. Cap Bawang soy sauce Company is soy sauce company in Ngawi. This company has been established since 1973 and include agroindustry. Total Feti Munika Sakti, Mohamad Harisudin, Raden Rara Aulia Qonita 231 productions of soybean sauce the last few years can be seen in Table 1 below. Table 1. Data of Soybean Sauce Productions in Cap Bawang Soy Sauce Company at Ngawi Regency Year Productions bottle ∆P bottle 2010 153.495 - 2011 160.434 6.939 2012 159.964 - 470 2013 146.044 - 13.920 2014 124.512 - 21.532 Source: Data Processed of Cap Bawang Soy Sauce Company at Ngawi Regency, 2015 Based on Table 1 can be said that productions of Cap Bawang soy sauce Company did not experience a significant increase every year. The decrease of the productions started in 2012 and continued until 2014. The decrease of the productions from year to year is great. This decrease of the productions is caused by one factor; the company can’t complete the demands of comsumers. The productions continue to decrease may influential to revenue of the company as well as influential sustainability Cap Bawang soy sauce Company. This research aims to identify costs, revenues and incomes of Cap Bawang Soy Sauce Company, critical success factors Strengths, Weaknesses, Opportunities and Threats of Cap Bawang Soy Sauce Company, alternative strategies and priority of business development strategy that can be applied to soybean sauce production in Cap Bawang Soy Sauce Company. Several data analysis techniques both quantitative and qualitative were used to identify the business so that it earned internal and external conditions of the company, acquired alternative strategies and priority strategic. The company needs to determine priority strategic so the soybean sauce production business running smoothly. METHOD Basic Method This research uses descriptive analytical basis. The research technique is the case study. Research locations selected intentionally purposive in Cap Bawang soy sauce Company at Ngawi Regency. Key Informant Determination of key informants is intentionally purposive, the number of the informants is different for each stage. The selection of key informants is considered to know the business of soybean sauce production so the researcher can get much information. The selected of key informants in stage I to identify critical success factors consist of 17 people. Key informants to identify internal factors consist of owner and employees of the company. The key informants who identify external factors consist of Disperindagkop Ngawi, customers, suppliers and resellers of Cap Bawang Soy Sauce. Key informants were selected in stage II to give weight and rating on IFE and EFE Matrix consist of 3 people, they were the owner and employee of the company and also Disperindagkop Ngawi. Key informant was selected in stage III to produce alternative strategies and priority of the strategy is the owner of the company. Data Analysis Techniques Method of data analysis was performed use analysis of business 232 consists cost, revenue, and income of Cap Bawang Soy Sauce. Alternative strategies were formulated by qualitative SWOT Matrix and quantitative SWOT Matrix. The priority of strategy was determination using QSPM. Company’s revenue is calculated with the following formula: TR = Y x Py 1 Description: TR Total Revenue of soybean sauce production Rp, Y Products of soybean sauce production Bottle, Py Price of soybean sauce production Rp. Company’s cost is calculated with the following formula: TC = TFC + TVC 2 Description: TC Total Cost of soybean sauce production Rp, TFC Total Fixed Cost of soybean sauce production Rp, TVC Total Variable Cost of soybean sauce production Rp. Company’s income is calculated with the following formula: Pd = TR - TC 3 Description: Pd Income of soybean sauce production Rp, TR Total Revenue of soybean sauce production Rp, TC Total Cost of soybean sauce production Rp. Analysis of internal factors aims to identify the key internal factors into strengths and weaknesses of soybean sauce production in Cap Bawang Soy Sauce Company. The strengths and weaknesses are analyzed use IFE matrix to acquire main strength and main weakness of soybean sauce production. Analysis of external factors aims to identify the key external factors into opportunities and threats of soybean sauce production in Cap Bawang Soy Sauce Company. The opportunities and threats are analyzed use EFE matrix to acquire main opportunity and main threat of soybean sauce production. The method for give weight use pairwise comparison. To give rating, it uses mode of data which have been collected. If there is no mode, the median of data is used Alternative strategies are formulated with quantitative SWOT Matrix and qualitative SWOT Matrix. Analysis of quantitative SWOT Matrix produces the companys position. This matrix has four quadrants, they are quadrant I, quadrant II, quadrant III and quadrant IV and each quadrant has type of alternative strategies Pearce and Robinson, 2007. Analysis qualitative SWOT Matrix produces the alternative strategies. This matrix has four cells possibility of alternative strategies : SO strategies Strength-Opportunity, WO strategies Weakness-Opportunity, ST strategies Strength-Threat and WT strategies Weakness- Threat David, 2013. Alternative strategies have been formulated are analyzed in QSPM. This matrix determines the relative attractiveness of alternative strategies that are built based on the critical success factors. The relative attractiveness of each alternative strategy is calculated by determining the cumulative effect of each of the key success factors of external and internal David, 2013. RESULTS AND DISCUSSION General Conditions of Cap Bawang Soy Sauce Company Cap Bawang Soy Sauce Company is located in Untung Suropati II Street No. 34 Ngawi, East Java. The company was founded by individuals, namely Mr. Yoso Soeharjo on August 8 th , 1973. This soybean souce production business has had a License SIUP from the Department of Trade No.304KP1323PPKR86. In addition the company also has a license from the Department of Industry No.224JATIM.25121X1991. The Company has long-term goals and short-term goals. Short-term goal are to improve the quality of production, realizing the production target in accordance with a predetermined plan, as well as maintain and sustain life of the company. The long term goals are achieving maximum profit and hold the companys expansion. At the present, the owners of Cap Bawang Soy Sauce Company is Mr. Hary Feti Munika Sakti, Mohamad Harisudin, Raden Rara Aulia Qonita 233 Wahono. There are five parts of the company that are purchasing, warehouse, production, administration and public services and the marketing department. There are also members who assist the companys production activities. Analysis of Cost, Revenue and Income Total cost is overall costs in soybean sauce production that from adding up the fixed costs and variable costs. The fixed costs consist of depreciation of tools cost, land and building tax cost, and also electricity cost. The variable cost consists of material cost, fuel cost, packaging attributes cost, and labor cost. The revenue is all income that received in soybean sauce production. The income is the amount of value for the money earned from subtracting the company’s revenue with company’s total costs. The income of soybean sauce production in Cap Bawang Soy Sauce Company for one year can be seen in Table 2. Table 2. Income of Soybean Sauce Production in Cap Bawang Soy Sauce Company at Ngawi Regency 2015 Commentary Amount Rp Total Rp Cost 803,803,450 a. Fix Cost depreciation of tools 9,935,000 land and building tax 7,843,000 Electricity 4,800,000 b. Variable Cost material 412,561,000 Fuel 68,316,000 packaging attributes 18,288,450 Labor 282,000,000 Revenue 924,048,000 Income 120,244,550 Source: Data Processed in 2016 Based on the table, the highest of fix cost is depreciation of tools cost. The tools used for the soybean sauce production are soy sauce bucket, stirrer, filter bucket, little bucket, winnowing, gas stove, packaging bottle tool, bottle soy sauce, crates, and water pumps. Trucks are helpful for the marketing of soy sauce product. The smallest fix cost is electricity. The highest of variable cost is materials cost. The main material of soybean sauce is soy. Auxiliary materials of soybean sauce are coconut sugar, salt and water. Seasoning of soybean sauce made from garlic, pekak, laos dan adas. The smallest variable cost is packaging attributes cost. Total of company’s cost in 2015 amount to Rp 803,803,450.00. The company’s revenue is Rp 924,048,000.00. So that, the company’s income of soybean sauce production in 2015 amount to Rp 120,244,550.00. Base on Hapsari 2008 when the company’s revenue is bigger than total cost RC 1 this inform that business deserves to be continued. The company’s revenue can be used to develop the companys business and daily lives of the owner. Analysis of Internal Factors and External Factors Internal factors include the condition of the financial, human resources, production, product variations and marketing. Condition such factors produce strengths and weaknesses of soybean sauce production are analyzed in the IFE Matrix. Kasim 2011 score is calculated by multiplying the weight by the rating. The weight is indicates the level importance of the critical success factors. 234 The most important factor of the strength is marketing process by visiting consumers with the weight amount to 0.1011. Strength that has the lowest interest level is bookkeeping is done in an orderly manner with the weight amount to 0.0322. The most important factor of the weakness is level of consistency and maturity less consistent with the weight amount to 0.0964. Weakness that has the lowest interest level is not increase in labors quality with the weight amount 0.0395. The main strength in soybean sauce production is having distinctive flavor that tasteful with the score amount to 0.3168. The main weakness in soybean sauce production is efforts in achieve the business vision is low with the score amount 0.1195. The difference in value score of the strengths and weaknesses is 0.7229 indicates that the internal factors of the company is in a positive position cause that is more than 0 Pearce and Robinson, 2007. This means that the company has the ability to increase the strength of the business. Table 3. IFE matrix Soybean Sauce Production in Cap Bawang Soy Sauce Company at Ngawi Regency Internals Faktor Weight Rating Score Strengths 1. Soybean sauce production is profitable 0,0890 3 0,2669 2. Bookkeeping is done in an orderly manner 0,0322 4 0,1288 3. The labors are reliable 0,0460 3 0,1381 4. Process of productions are regularly 0,0364 3 0,1092 5. The products do not use preservatives 0,0535 4 0,2142 6. Having distinctive flavor that tasteful 0,0792 4 0,3168 7. The marketing process by visiting consumers 0,1011 3 0,3034 Total of Strengths 1,4775 Weaknesses 1. The company’s revenue is experience a downward trend 0,0612 1 0,0612 2. Efforts in achieve the business vision is low 0,0597 2 0,1195 3. There is no clear job specification 0,0439 2 0,0878 4. No increase in labors quality 0,0395 2 0,0789 5. The process of production is conducted openly 0,0698 1 0,0698 6. There is only one packaging and product size 0,0636 1 0,0636 7. Level of consistency and maturity less consistent 0,0964 1 0,0964 8. Distribution only in the area of Ngawi 0,0490 2 0,0980 9. Promotion and advertising is still minimum 0,0794 1 0,0794 Total of Weaknesses 0,7546 Difference Total Strengths - Total of Weaknesses 0,7229 Source: Primary Data Analysis, 2016 Feti Munika Sakti, Mohamad Harisudin, Raden Rara Aulia Qonita 235 External factors include economic conditions, social, cultural, technological, consumers, retailers, suppliers, and natural condition. Condition such factors produce opportunities and threats of soybean sauce production are analyzed in the Table 4 that is EFE Matrix. The most important factor of opportunity is soy sauce as food complementary materials that are often used with the weight amount to 0.1060. Opportunity that has the lowest interest level is rapid technological developments with the weight amount to 0.0340. The most important factor of the threat is the material derived from various suppliers with the weight amount to 0.1163. Threat that has the lowest interest level is technology of production is expensive with the weight amount 0.0543. The main opportunity in soybean sauce production is soy sauce as food complementary materials that are often used with the score amount to 0.4241. The main threat in soybean sauce production is Season affect the availability of materials with the score amount to 0.1750. The difference in value score of the opportunities and threats is 0.8388 indicates that the external factors of the company is in a positive position cause more than 0 Pearce and Robinson, 2007. This means that the company has the ability to take advantage of business opportunities. Table 4. EFE matrix Soybean Sauce Production in Cap Bawang Soy Sauce Company at Ngawi Regency External Factors Weight Rating Score Opportunities 1. The economic development of the public is good 0,0804 3 0,2412 2. Received good response from the public 0,0961 3 0,2883 3. Soy sauce as a food complementary materials that are often used 0,1060 4 0,4241 4. Rapid technological developments 0,0340 3 0,1021 5. High demand from consumers 0,0938 4 0,3753 6. Created good relations between company and suppliers 0,0511 3 0,1534 Total of Opportunities 1,5845 Threats 1. Technology of production is expensive 0,0543 2 0,1086 2. Technology of production i s not available in the area of Ngawi 0,0609 2 0,1219 3. Consument demand is higer 0,0557 2 0,1115 4. Retailers want a high profit 0,0574 2 0,1147 5.The price of materials are fluctuate 0,1063 1 0,1063 6. The material derived from various suppliers 0,1163 1 0,1163 7. Season affect the availability of materials 0,0875 2 0,1750 Total of Threats 0,7457 Difference Total of opportunities - Total of Threats 0,8388 Source: Primary Data Analysis, 2016 236 Alternatif Strategies of Soybean Sauce Production Alternative strategies in soybean sauce production are formulated with two analytical techniques. Quantitative SWOT Matrix is used to determine the position of the soybean sauce productin. Qualitative SWOT Matrix is used to formulate alternative strategies based on the companys position. The results of the score on IFE Matrix and EFE Matrix are analyzed with quantitative SWOT Matrix to determine the position of soybean sauce production in Cap Bawang Soy Sauce Company at Ngawi Regency. On the x axis of the quantitative SWOT matrix obtained from subtracting the strength score to weakness score in matrix IFE of soybean sauce production. The value of x axis is 0.7229. The y axis of the quantitative SWOT matrix obtained from subtracting the opportunity score to threat score in matrix EFE of soybean sauce production. The value of y axis is 0.8388. The position of Cap Bawang Soy Sauce Company in the quantitative SWOT Matrix showed at figure 1. Opportunity 3 O Change Strategy 2 Progresif 1 0.7208 ; 0.8414 W S Weakness -3 -2 -1 1 2 3 Strenght -1 Survive Strategy -2 Diversification of Strategy -3 T Threath Figure 1. Quadrant Quantitative SWOT of Soybean Sauce Production in Cap Bawang Soy Sauce Company at Ngawi Regency Soybean sauce production at quadrant I that is progressive. These position make business developments are in the most favorable conditions Suci, 2013. Alternative strategies are formulated to maximize the strengths and take advantage of business opportunities and the strategy can be a market development, product development, vertical integration, horizontal integration, concentric diversification and joint venture. Qualitative SWOT Matrix is used to formulate alternative strategies of business development. Alternative strategies are formulated together with key informant owner of the company by combining the strengths and opportunities of a business soy sauce production and adjust the position of the company based on analysis of quantitative SWOT Matrix Feti Munika Sakti, Mohamad Harisudin, Raden Rara Aulia Qonita 237 Internal Factors External Factors Strengths S Weaknesses W Opportunities O SO Strategies WO Strategies 1. Planning the sales promotion and advertising of the products S 1 , S 5 ,S 7 ,O 1 ,O 3 ,O 4 2. Make the diversification of packaging products S 1 , S 3 , S 4 , O 2 , O 4 , O 5 , O 6 3. Establish SOP Standard Operating Procedure for maintaining product quality S 2 , S 3 , S 6 , O 2 , O 4 4. Distribute the product to the geographical area of the new marketing S 3 , S 4 , S 7 , O 1 , O 2 , O 3 Threats T ST Strategies WT Strategies Figure 2. Quadrant Qualitative SWOT of Soybean Sauce Production in Cap Bawang Soy Sauce Company at Ngawi Regency The result of position analysis indicates that the company in the quadrant I so the alternative strategies are formulated is SO strategy. Chan 2011 SO strategy is to make the best use of the internal strengths while grasping the external opportunities to obtain the advantage. Base on strengths and opportunities formulated alternative strategies can be applied to the business of soy sauce production. Alternative strategies that produce from qualitative SWOT Matrix are planning the sales promotion and advertising of the products, make the diversification of packaging products , establish SOP Standard Operating Procedure for maintaining product quality,distribute the product to the geographical area of the new marketing. 238 Tabel 5. Matrix QSPM of Soybean Sauce Production in Cap Bawang Soy Sauce Company at Ngawi Regency Key Factors Weight Alternative Strategies Strategy 1 Strategy 2 Strategy 3 Strategy 4 AS TAS AS TAS AS TAS AS TAS Strengths S 1 0.0890 2 0.1780 4 0.3559 1 0.0890 3 0.2669 S 2 0.0322 1 0.0322 3 0.0966 4 0.1288 2 0.0644 S 3 0.0460 1 0.0460 4 0.1842 3 0.1381 2 0.0921 S 4 0.0364 2 0.0728 4 0.1455 1 0.0364 3 0.1092 S 5 0.0535 2 0.1071 3 0.1606 4 0.2142 1 0.0535 S 6 0.0792 2 0.1584 3 0.2376 4 0.3168 1 0.0792 S 7 0.1011 1 0.1011 3 0.3034 2 0.2023 4 0.4045 Weaknesses W 1 0.0612 2 0.1225 4 0.2449 1 0.0612 3 0.1837 W 2 0.0597 1 0.0597 3 0.1792 4 0.2389 2 0.1195 W 3 0.0439 1 0.0439 3 0.1317 4 0.1756 2 0.0878 W 4 0.0395 2 0.0789 3 0.1184 4 0.1579 1 0.0395 W 5 0.0698 1 0.0698 3 0.2093 4 0.2791 2 0.1395 W 6 0.0636 3 0.1909 4 0.2545 1 0.0636 2 0.1272 W 7 0.0964 1 0.0964 3 0.2891 4 0.3855 2 0.1928 W 8 0.0490 3 0.1469 2 0.0980 1 0.0490 4 0.1959 W 9 0.0794 4 0.3177 3 0.2383 1 0.0794 2 0.1588 Opportunities O 1 0.0804 3 0.2412 4 0.3216 1 0.0804 2 0.1608 O 2 0.0961 2 0.1922 4 0.3843 1 0.0961 3 0.2883 O 3 0.1060 3 0.3181 4 0.4241 1 0.1060 2 0.2121 O 4 0.0340 2 0.0681 4 0.1362 3 0.1021 1 0.0340 O 5 0.0938 2 0.1876 4 0.3753 1 0.0938 3 0.2815 O 6 0.0511 1 0.0511 4 0.2046 2 0.1023 3 0.1534 Threats T 1 0.0543 1 0.0543 3 0.1629 4 0.2172 2 0.1086 T 2 0.0609 1 0.0609 4 0.2437 3 0.1828 2 0.1219 T 3 0.0557 2 0.1115 3 0.1672 4 0.2229 1 0.0557 T 4 0.0574 2 0.1147 4 0.2294 1 0.0574 3 0.1721 T 5 0.1063 1 0.1063 3 0.3190 4 0.4254 2 0.2127 T 6 0.1163 2 0.2326 3 0.3488 4 0.4651 1 0.1163 T 7 0.0875 2 0.1750 3 0.2625 4 0.3500 1 0.0875 STAS 3.7360 6.8271 5.1175 4.3194 Source: Primary Data Analysis, 2016 Priority Strategiy of Soybean Sauce Production The priority of strategy which selected has the highest of STAS. The STAS reveal which strategy is most attractive. Higher scores point at a more attractive strategy, considering all the relevant internal factors and external factors that could affect the strategic decision Ommani, 2011. These are the alternative strategies are formulated with qualitative SWOT Matrix and their STAS as follows: 1. Planning the sales promotion and advertising of the products 3.7360. 2. Make the diversification of packaging products 6.8271. 3. Establish SOP Standard Operating Procedure for maintaining product quality 5.1175. 4. Distribute the product to the geographical area of the new marketing 4.3194. The priority strategy to business development of soybean sauce production in Cap Bawang Soy Sauce Company at Ngawi Regency based QSPM Quantitative Strategic Planning Matrix is the second strategy with the greatest STAS 6.8271 which make the diversification of packaging products. Strategy diversification of packaging products is a kind of market development strategy. This strategy maximizing the strength factors of soybean sauce Feti Munika Sakti, Mohamad Harisudin, Raden Rara Aulia Qonita 239 production that are the company’s revenue is experience a downward trend, there is no clear job specification, and no increase in labors quality. And also to obtain the advantage from opportunity factors that are received good response from the public, rapid technological developments, high demand from consumers, and created good relations between company and suppliers. Strategy diversification of packaging products expands market share. The large market share will be increased the number of consumers. These consumers will be increase the productions of the soybean sauce product and than increase the income of company. CONCLUSION Based on the research business development strategy of soybean sauce production in Cap Bawang Soy Sauce Company at Ngawi Regency acquired priority development strategy that can be applied to soybean sauce production is make development with diversification of packaging products. Therefore, Cap Bawang Soy Sauce Company can add types of packaging products, such as sachets, pouches and plastic bottles. The company also can make variety of package sizes product that smaller than the previous. This strategy adds the market segment and enable consumers to make purchases of Cap Bawang soy sauce. REFERENCES Cahyadi, W. 2006. Analisis dan Aspek Kesehatan Bahan Tambahan Pangan . Jakarta: Bumi Aksara. Chan, X. 2011. A SWOT study of the development strategy of haier group as one of the most successful chinese enterprises. International Journal of Business and Social Science 211: 151-153. David, F.R. 2013. Strategic Manajement, Consepts and Case, Thirteenth Edition. Prentice Hall Boston. Hapsari, H., Djuwendah, E., and Karyani, T. 2011. Peningkatan nilai tambah dan strategi pengembangan usaha pengolahan salak manonjaya. Jurnal Agrikultura 193: 211-212. Kasim, S.N., Sirajuddin, S.N., and Irmayani. 2011. Strategi pengembangan usaha sapi perah di Kabupaten Enrekang. Jurnal Agribisnis 53: 91-92. Kotler, Philip. 2006. Marketing Management . Twelfth Edition. Pearson Educations, Inc. Ommani, A.R. 2011. Strengths, weaknesses, opportunities and threats SWOT analysis for farming system businesses management: Case of wheat farmers of Shadervan District, Shoushtar Township, Iran. African Journal of Business Management 522: 9452- 9455. Pearce, A., and Robinson. 2007. Strategic Management, Formulation, Implementation, and Control. McGraw-Hill. Seto, S. 2001. Pangan dan Gizi: Ilmu Teknologi, Industri dan Perdagangan . Jurusan Teknologi Pangan dan Gizi. Fakultas Teknologi Pertanian. Bogor: IPB. Suci, R.P. 2013. Analysis strategy for small and medium business development policy Gresik District in East Java. IOSR Journal of Business and Management IOSR- JBM 81: 6-7. 240 DISCUSSION FROM PARALLEL SESSION PAPER TITTLE BUSINESS DEVELOPMENT STRATEGY SOYBEAN SAUCE PRODUCTION IN CAP BAWANG SOY SAUCE COMPANY AT NGAWI REGENCY AUTHOR Feti Munika Sakti, Mohamad Harisudin, Raden Rara Aulia Qonita DISCUSSION QUESTION 1. Why the effort of the business is low every year? 2. What about the promotionmarketing? 3. Is there any advertising for their product? 4. How to improve the producting? ANSWER 1. Main problem is the packaging the variety just one 2. Promotion just only mouth to mouth SUGGESTION 1. Make sure there is connection before figure, prinity, strategy, and conclusion 2. State in your slide why the cap bawang company production loser decrease every year because advertising 3. Need to make sure about progressive of quadrant I Development for Human Welfare 2016 241 FOREIGN LABOR RECRUITMENT IN OIL PALM PLANTATION IN MALAYSIA Marlia Musa 1 , Amin Mahir Abdullah 1 , Mohd Mansor Ismail 1 1 Department of Agribusiness and Bioresource Economics, Faculty of Agriculture, University Putra Malaysia, UPM Serdang, Selangor corresponding author: marlia_lieya86yahoo.com ABSTRACT As oil palm plantation in Malaysia is progressively expanding, more labors are therefore needed. There are huge dependencies on foreign labors in the upstream sector mainly the fruit harvesters and field workers. This is to cater the labor shortage and there are about 77 of oil palm plantation workers are foreign labor, normally work in production stage. This study aims to investigate the factors and reasons for hiring foreign labor in the oil palm plantation sector. The survey was carried out by distributing the questionnaires to the plantation managers. The results show that 85 of employers recruit foreign labors because they are willing to work hard. Able to perform different task efficiently and work experience is the main criteria for the selection and recruitment. Labor from Indonesia is the most preferred due to high resilience, skills and work hard. The advantages of hiring foreign labors are they have a wide experience and willing work in remote locations. However, hiring foreign labor also brought some the negative impacts such as over-dependence on foreign labor and the outflow of remittance from this country. As a recommendation, the government should review the current policy on the recruitment of foreign labor and limit the immigration of them and provide more career development for local workers. The government is recommended to provide sufficient research funds for developing suitable and efficient technologies especially FFB harvester to replace or reduce the requirement of human labors. Keywords: foreign labor, oil palm plantation, shortage INTRODUCTION Oil palm plantation sector is a labor- intensive industry and since Malaysia is aggressively expanding its oil palm plantation, thus it gives rise to the huge labor requirement in this sector. The plantation sector uses a lot of manual labor to the job in the upstream activities, especially for fruit harvester and collectors. However, the job in the plantation sector is not getting much attention and interest among local workers, lead to a labor shortage in this industry. To sustain the oil palm industry, foreign workers were gradually brought in. For over three decades, Malaysia has relied heavily on the use of foreign workers either legally or otherwise Abdul Hamid, Singh, Wan Yusof, Md Yusof and Mustafa, 2011. In Malaysia, foreign labors have monopolized the majority of employment in the plantation sector, where most of them are initially unskilled workers. According to the Ministry of Plantation and Industrial Commodity 2014, there are about 77 percent of foreign labors employed in the oil palm plantation in 2013. Whereas along the work done by Ramli, Azman and Ayat 2011, the proportion of foreign actors to local is two foreign workers to one local. This situation shows that the majority of labors in oil palm plantation has been dominated by foreign labors. Based on data provided by the Department of Immigration, Malaysia 2014, there are about 353, 081 foreign labors registered to work in plantation sector and a part of this, 73.7 per cent is Indonesian. The rest came from Bangladesh, India, Nepal and others countries. The distribution of Marlia Musa, Amin Mahir Abdullah, Mohd Mansor Ismail 242 foreign labor in plantation sector not only high in the large plantation company which is about 98.6 out of total labor, but in small and medium size of plantation companies also, more than half 68 of labors recruited are foreign labors Ximena Del Carpio, Ozden, Testaverde, Marouani, Nilsson and Wagner, 2015. It is undeniable that oil palm plantation sector provides more job opportunities for millions of people especially in rural area. However, most of the locals refuse to get involved in the plantation sector due to several reasons studied in this research. The plantation sector is labeled as a 3D’s sector, literally means dirty, dangerous and difficult, thus make locals refuse to get involved and work in this sector. Thus, the working environment also makes a plantation job less attractive for local despite it provides many opportunities Daud, 2006. Besides that, local people unwilling to have similar wages as what is received by foreign labors and they perceived better job opportunities in other sectors Abdul Hamid, Singh, Md. Yusof, and M. Abdullah, 2011. Due to these attributes, it has been reported that there is less participation of local people in the plantation sector and Malaysia start to depend on foreign labor Lee, 2011; Abdul Rahman, Wang, Wood and Shu, 2012. On the other side, the employers also have to tackle labor shortage issues since insufficient workers may affect the chain of production and cause a huge loss and adversely affect the whole industry. To overcome the labor shortage problem, employers started to look for foreign labors. The employers prefer to hire foreign labors because they are disciplined, low wage and willing to work long hours Abdul Hamid et al, 2011. In the 2010, it was found that the ratio of local to foreign labor in this sector was 1 : 2 Ramli, Azman and Ayat, 2011. Indonesian is the most preferred because of the cultural, language and religion are quite similar to Malaysian’s making communication more effective Abdul Hamid, Singh and Jamadi, 2013. Besides that, in recruitment of foreign labor, employers have set criteria and characteristics of the labor to ensure the labor are suited to work in the plantation and can perform the task given. As study done by Wan Hassan, Dollah and Herviani 2015 in oil palm plantation in Sabah, indicates that Indonesian labors are preferred because they have the required skills for harvesting and pruning jobs, and have wide experience to works in plantation. These make Indonesian especially from Bugis ethnics is the main group of foreign labor recruited in oil palm plantation in Sabah. Meanwhile, some of the other reasons for employment of foreign labor as compared to local are due to the wages factor and attitude of foreign labor to work in long hours. This makes the foreign workforce most preferred by many employers Marhani, Adnan, Baharuddin and Hassan, 2012. In addition, the foreign labors hired in Malaysia have brought some positive and negative impacts. It is known that foreign labor helps to solve the labor shortage confronting the plantation sector Hassan, 2009. Also, the attitude of foreign labor such as work hard, willing to work overtime and satisfied with basic amenities provided by employers are the main reasons why they are being preferred by employers. On the other hand, foreign labors can bring negative consequences like social problem; start to demand higher wage when they have an experience; suppress local wages Ismail, Bachtiar, Osman and Mohd. Noor, 2003; the outflow of remittance; and decreasing in productivity Marhani et al, 2012. This study aims to investigate factors and reasons for hiring foreign labors in the oil palm plantation sector. Parallel to this aim, the specific objectives of this study are i to investigate the motivations for hiring foreign labor, ii to identify the criteria for foreign labor recruitment and selection, iii to identify the sourcing country preferred by the employers, and iv to determine the advantages and disadvantages of hiring foreign labors. Development for Human Welfare 2016 243 METHOD This study has been carried out in the selected oil palm plantations in Malaysia, which covered five states including Johor, Negeri Sembilan, Perak and Terengganu. A stratified random sampling was applied to select the respondents. A total of 40 plantation managers or assistant managers were selected as the respondents. A set of questionnaire has been distributed and several interviews have been conducted with the respondents to gather all required data and information. The data from the completed questionnaires were then analyzed using descriptive statistics. RESULT AND DISCUSSION Respondents’ and Plantation Profile Figure 1 represents the respondents by company. It shows that the respondents are from five plantation companies namely Kulim Plantation, RISDA Plantation, TH Plantation, Tradewinds Plantation and Boustead Plantation. All of these companies are among the major oil palm producer in Malaysia. Table 1 shows the distribution of the estate of the oil palm plantation companies in this study. The plantation is located scattered and not only concentrated in one state only, depending on the type of the plantation itself. Since there are limitation to conduct the survey in term of the remote location, willingness of the manager to participate in the survey and cooperation from the plantation to give information about the estate, thus a small sample size were obtained from this survey Figure 1. Respondents by Company Table 1. Distribution of Farm by State Kulim Plantation RISDA Plantation TH Plantation Tradewinds Plantation Boustead Plantation Pulau Pinang Perak Negeri Sembilan Terengganu Johor Source: Survey data 2015 25 22 10 15 28 Respondents profile Kulim Plantation RISDA Plantation TH Plantation Tradewinds Plantation Boustead Plantation Marlia Musa, Amin Mahir Abdullah, Mohd Mansor Ismail 244 Farm Characteristics As indicated in the Figure 2, the size of the farm varies ranging from 906 Ha until 3919 Ha. The majority of the plantations 13 plantations size range 1501 – 2000 Ha. A small number of the plantation has size less than 1000 Ha and surprising there are several plantations have size more than 3001 Ha. Basically, the large plantation size is the merge of two farms, the action taken by the management of the plantation due to cater the labor shortage. Figure 2: Size of The Plantation Figure 3: Foreign Labor Recruited By Country Of Origin Foreign Labors Recruited The distribution of foreign labors recruited by the plantation companies indicated in Figure 3. As shown, majority of plantation companies recruited labors from Indonesia. Less number of labors from the other country origin recruited even they are still preferred by the employer. Besides Indonesia, Bangladesh, Nepal and India, there are a number of labors recruited from Myanmar and Thailand to work in this sector. Motivations for Hiring Foreign Labors Figure 4 shows the motivations for hiring foreign labors among the respondents. The results indicate that 85 of the respondents indicated that foreign labor is willing to work hard as the motivation for hiring them; 67.5 indicated that foreign labors are more flexible in terms of working hour and tasks given. Besides that, the attitude of the foreign labor and low absenteeism also are the motivator for the employer to hire foreign labor. The finding in this study corroborates the study done by Abdul Hamid et. al 2011 where work attitude of foreign labor which are not choosy in carrying out the tasks and discipline are the reasons they are preferred by the employers. 5 10 15 Less than 1000 Ha 1001 - 1500 Ha 1501 - 2000 Ha 2001 - 2500 Ha 2501 - 3000 Ha More than 3001 Ha 4 8 13 7 1 7 N o . o f p lan tat io n Size of the plantation Size of the plantation 1000 2000 3000 4000 5000 4469 439 92 91 25 N o . o f for e ig n lab o rs Foreign labor recruited Development for Human Welfare 2016 245 Criteria in Foreign Labor Selection and Recruitment Before a labors is recruited in any one company or organization, the management basically has placed some criteria and qualifications that they look for in the candidate to ensure they can perform the job. Figure 5 reveals the criteria that the plantation managers looked for and preferred to recruit foreign labor in their plantations. The two preferred criteria among the plantation managers are the work capability of the labor to perform the jobs, and working experience. These two criteria are important for the plantation workers because those have experience and skills can perform better and contribute to higher productivity. Figure 4. Motivations for Hiring Foreign Labor among the Plantation Managers Figure 5. Criteria in Foreign Labor Recruitment and Selection Most Preferred Sourcing Country and Reason to Recruit Them The Department of Immigration, Malaysia gave a guideline which sourcing country that the employer can recruit foreign labors . It’s also depended on which sector they are being engaged. For the plantation sector, employers can recruit foreign labor from seven sourcing countries. As presented in Figure 6, all of the plantation managers preferred to recruit labors from Indonesia. A small number of them preferred to recruit foreign labor from Bangladesh, India and Nepal. According to the managers, Indonesian labors were most preferred because they were more resilience, work hard and always work for extra hour to 0,0 20,0 40,0 60,0 80,0 100,0 42,5 42,5 85,0 17,5 32,5 67,5 15,0 Motivations for hiring foreign labors 0,0 10,0 20,0 30,0 40,0 50,0 60,0 70,0 80,0 7,5 62,50 35,00 15,00 80,00 25,00 Criteria in foreign labour recruitment selection Marlia Musa, Amin Mahir Abdullah, Mohd Mansor Ismail 246 earn high income see Figure 7. Most of them are also tough to work in the plantation and have the skills required especially for harvesting job. Advantages and Disadvantages of Hiring Foreign Labor It is an undeniable hiring foreign labor will bring some positive and negative impacts, not only for the sector they are being engaged, but also to the host country. Results from this study, as shown in Figure 8 show the advantages of hiring foreign labor. The majority of the respondents 62.5 agreed that foreign labor has a wide experience in the plantation work. Besides that, foreign labor also can and willing to work at remote locations because most of the plantation located in the rural area, and foreign labors are more disciplined as compared to local labor. It can be seen that most of them are working hard to earn more income to send back to their families. However, hiring foreign labor also bring some negative consequences. Figure 6. Sourcing Country Preferred by the Employer Figure 7. Reasons for Hiring Foreign Labor from Preferred Sourcing Country Figure 9 depicts the negative impacts induced by the foreign labor. It is clearly shown that 72.5 of the respondents said that hiring foreign labor lead to over- dependence on them. It is because the unwanted job and jobs that is left by local labors has been fulfilled by foreign labors, leading the foreign labor to dominate the labor market and consequently we are abundance of them. In addition, high outflow of remittance and existence of illegal foreign labor also are the negative impacts induced by foreign labor. 0,0 20,0 40,0 60,0 80,0 100,0 Indonesia Bangladesh Nepal India 100,0 25,0 12,6 17,5 Sourcing country that most preferred to recruit workers 0,0 50,0 100,0 70,0 57,5 17,5 52,5 57,5 70,0 75,0 70,0 15,7 Reasons why hire them Development for Human Welfare 2016 247 Figure 8: Advantages of Hiring Foreign Labor Figure 9: Negative Impacts Induced by Foreign Labor CONCLUSIONS As a conclusion, there are various factors considered to recruit foreign labors. A manager as a leader in that particular plantation, must be selective and choose the right labor to perform the job because it will affect the company profit and productivity in the future. Some of the reasons for hiring foreign labors are they are working hard and can perform different task efficiently. The criteria for foreign labor selection are having a wide experience and have a skill to perform the work in the plantation. Most of the manager preferred to hire Indonesian foreign labor because they are hard working, high resilience and disciplined. The advantages of hiring foreign labor are they have a wide experience and can work on a remote location. On the other hand, the disadvantages of hiring them are over- dependence on them and high remittance outflow. As a recommendation, the government should review the current policy on the recruitment of foreign labor, limit the immigration of them and provide more opportunity in career development for Marlia Musa, Amin Mahir Abdullah, Mohd Mansor Ismail 248 REFERENCES Abdul Hamid, A.R., Singh, B., Md. Yusof, A., and M. Abdullah, N. A. 2011. ‘The employment of foreign workers at construction sites ’. 2 nd International Conference on Construction and Project Management, IPEDR. Vol. 15. 2011, IACSIT Press, Singapore. Abdul Hamid, A.R., Singh, B., Wan Yusof, W.Z., Md Yusof, A., and Mustafa, N. 2011. ‘Problems faced by contractors in managing foreign workers on construction sites ’. 2 nd International Conference on Construction and Project Management, IPEDR Vol.15 2011, IACSIT Press, Singapore. Abdul Hamid, A. R., Singh B., and Jamadi M. A. 2013. Foreign labour employment in construction project. International Journal of Scientific and Research Publications 311. Abdul Rahman, H., Wang C., Wood L.C., and Shu F.L. 2012. Negative impact induces by foreign workers; evidence in Malaysian construction sector. Habitat International 36: 433-443. Daud, A. 2006. Labour constraints in the plantation industry. Oil Palm Industry Economic Journal 622006. Department of Immigration, Malaysia. 2014. Statistic of Foreign Workers in Malaysia . Hassan, C. H., 2009. Buruh asing di Malaysia: trend, kaedah, kesan, masalah dan cara mengatasinya. Journal of Southeast Asian Studies . Volume 14. Pp 119-132. Ismail, R., Bachtiar, N., Osman. Z., and Mohd. Noor, Z. 2003. Peranan Buruh Asing terhadap Pertumbuhan Output, Kesempatan Kerja dan Upah dalam Sektor Pembuatan di Malaysia. Jurnal Ekonomi Malaysia. Volume 37. 2003 Pp 103-128. Lee, Y.N. 2011. Increase Malaysia Palm Oil Production Efficiency. Faculty of Social Science, University of Bergen. Marhani, M. A., Adnan, H., Baharuddin, H. E., Esa, M. R., and Hassan, A. A. 2012. Dependency of Foreign Workers in Malaysian Construction Industry. Built Environment Journal. Vol. 9, No. 1, 39-50, 2012. Ramli, A., Azman, I., and Ayatollah Khomeini, A. R. 2011. Labour requirements in the Malaysian oil palm industry in 2010. Oil Palm Industry Economic Journal 112. Wan Hassan, W. H., Dollah, R., and Herviani, D. 2015. Tenaga kerja Indonesia TKI Bugis dalam sektor perladangan kelapa sawit di Sabah. Journal of the Centre for the Promotion of Knowledge Language Learning 22: 61-79. Ximena Del Carpio, Ozdan, C., Testaverde, M., Marouani, M., Nilsson, B., and Wagner, M. 2015. Foreign workers in Malaysia: labour market and firm level analysis. Malaysian Journal of Economic Studies 521: 1-19 . Development for Human Welfare 2016 249 Discussion from Parallel Session PAPER TITLE Foreign Labor Recruitment in Oil Palm Plantation in Malaysia AUTHOR Marlia Musa, Amin Mahir Abdullah, Mohd. Mansor Ismail DISCUSSION QUESTION - Is it the legal or illegal labor? Because actually the illlegal labor is the most favourite in Malaysia - What is the AEC effect on foreign labor movement? ANSWER - The labor is legal ones in this study - The labors will be free but the government should control the foreign labor to anticipate domination of foreign labor SUGGESTION 250 M ICRO ENTREPRENEURS’ INTENTION TO BECOME MEMBER OF MICROCREDIT SCHEME WITH EDUCATIONAL TRAINING AND MOTIVATIONAL PROGRAM Rika Terano 1 , Zainalabidin Mohamed 1 and Fatin Najiha Mohd Tammili 1 1 Department of Agribusiness and Bio-Resource Economics, Faculty of Agriculture, Universiti Putra Malaysia Serdang 43400 Selangor, Malaysia corresponding author: rika_tupm.edu.my ABSTRACT In Malaysia, there are enterprises with smaller size called micro-enterprises. The entrepreneurs of these enterprises seek opportunities to obtain operating and management cost to uplift their business to small and medium-sized enterprises. In order to support micro-enterprises financially, there are various loans available for micro enterprises entrepreneurs MEs in Malaysia. In addition to the fund, some of the financial institutions also provide technical, financial and management training and guidance in order to develop the entrepreneurial skills as well as the businesses. A series of field surveys was conducted using stratified random sampling in selecting two hundred micro enterprises entrepreneurs in 2015 using structured questionnaire for gathering needed information in Kuala Selangor, Hulu Langat, and Gombak in Selangor. The survey consisted of entrepreneurs who take loans from financial institutions that do not provide educational training and motivational programs ETMP and those who do not take loans. In order to clarify the characteristics of entrepreneurs having the intention to become members of microcredit scheme with ETMP in future, two methods of analysis were applied. They are descriptive analysis and binary logistic regression analysis. The results show that 87 43.5 micro- entrepreneurs have the intention of becoming members of microcredit scheme with ETMP. The binary logistic regression indicated that women involvement in business, on time repayment and educational background of the respondents are important determinant of intention to join ETMP. Keywords: microcredit, educational, motivational, entrepreneur, intention INTRODUCTION For several decades, Malaysia has been facing issues of poverty and inequality existing among ethnicity and urban-rural residences. The Government has played the leading role in poverty eradication by providing income- generating projects, amenities to improve the quality of life and implementing programs to inculcate positive values among the poor. The government started launching the New Economic Policy NEP in 1970 for poverty eradication and economic development. Government effort is still ongoing to reduce income inequalities and narrowing the urban-rural income disparity, through series of policies which is currently implemented in the 11 th Malaysian Plan. The Government programs are also being supported by NGOs and private sectors, which provide wider opportunities to the poor to improve their livelihood. Various state-based poverty eradication foundations intensified their efforts in providing skills, training as well as in-kind and financial contributions to the poor. Poverty ratio has declined in each state and overall improved up to 0.6 in Malaysia EPU, 2015. Eleventh Malaysia plan attempts to empower communities for a productive and prosperous society. In the 11th Malaysia plan, emphasis was also given to 40 of households who are categorized as lower income groups and are to be uplifted to middle-class groups. Rika Terano, Zainalabidin Mohamed and Fatin Najiha Mohd Tammili 251 Thus, it will accelerate regional growth for better geographic balance, transforming Figure 1. Contribution of SMEs to GDP at Constant 2010 Prices for the Year 2014 Source: SMEs corp Malaysia, 2016 rural areas to uplift the well-being of rural communities, and enhancing Bumiputera economic community opportunities to increase wealth ownership. In the struggle for this attainment, entrepreneurship in small and medium enterprises SMEs was introduced to be a keyword in obtaining business opportunities. In the year 2014, value added of SMEs contributed 35.9 per cent to GDP at constant 2010 prices and 35.8 per cent at current prices Department of Statistics, 2015. This has portrayed the importance of SMEs industry in supporting and upholding the momentum of the Malaysia’s economy. Figure 1 shows the contribution of SMEs to the sector’s total value added. The agricultural sector posted the highest SMEs contribution with a share of 48.6 per cent. The SMEs in this sector was supported by rubber, oil palm, livestock and other agricultural sub-sectors especially in food crops such as vegetables and fruits. In order to improve household income level and create equity sustainable society, entrepreneurship has an important role to play in the Malaysian economy. Small and medium enterprises SMEs have started making great impacts on the economy as contributions to GDP among SMEs companies increased from 32.2 in 2010 to 35.9 in 2014 SME Corp Malaysia, 2014. For further development of the SMEs sector, a total of RM500 million has been allocated in 2015 for reactivation of SMEs business and alleviating short-term cash flow problem under microcredit scheme in Malaysia. Along with SMEs, the growth of the smaller size enterprises called micro- enterprise was emphasized to boost the Malaysian economy by turning them into SEMs SMEs corp Malaysia, 2016. In Malaysia, microcredit schemes mostly contribute the initial investment and operation fund among micro-enterprises. There are several types of loans available for local enterprises in Malaysia such as Merakyatkan Ekonomi Selangor MES, Yayasan Usaha Maju Sabah YUM, Yayasan Bina Upaya Darul Ridzuan YBUDR, Unit Pembangunan Usahawan Negeri Kedah UPUK, SME Bank, TEKUN, Agro Bank, Amanah Ikhtiar Malaysia AIM. The eleventh Malaysia Plan is also addressed towards enhancing local Malaysians in economic participation and increasing entrepreneurs to boost the economy growth as it continued to assist in terms of financing, support services, and capacity building. Thus over RM9 252 billion in financial assistance was provided to more than 414,000 local Malaysian businesses. Furthermore, loans of RM8.6 billion have benefited 413,278 micro and small businesses. As one of the microcredit schemes providing training and motivational programs, AIM needs to be paid attention. It is reported in 11 th Malaysia plan that the number of AIM member who earn a monthly income of more than RM3,500 have increased from 27,770 in 2010 to 128,450 in 2014. AIM was the first microfinance institution in Malaysia and the largest Grameen Bank replication outside Bangladesh. It was developed in 1988, under the Trustee Incorporation Act 258 revised 1981 Chamhuri Quinones, 2000. AIM is a poverty-oriented microfinance institution that provides loans only to the poor. Selangor in Peninsular Malaysia was the site of the pilot project of the Grameen Bank concept, known as “Project Ikhtiar” with a pilot project for two and a half years, involving 373 poorest households who received their first welfare loan. The Huge success demonstrated by female members has given confidence to the founding committee to proceed with the project development initiative to the states that have high poverty rates. The attendance rate at meeting center and monthly revenue visualized the significant difference between male and female participants. AIM started appointing women as representatives to participate in the initiative at the weekly meeting. In addition to the weekly meeting among microcredit scheme members for timely repayment system, currently, there are various skills upgrading opportunities available in the scheme such as entrepreneurial training, skills acquisition training, and consultancy. Since the government policy is channeled towards increasing the number of skilled entrepreneurs among local entrepreneurs, the microcredit scheme has not only been taking on a large role in creating opportunities for micro- enterprises to grow but also educating, motivating and upgrading management and entrepreneurial skills. Therefore, the research tends to identify the micro entrepreneurs interested in joining the microcredit scheme with ETMP to upgrade their business skills and have more interaction with members of the microcredit scheme for their business development. Identifying those entrepreneurs, who seek opportunity not only to obtain loans but also to join ETMP is important to increase skilled entrepreneurs and develop micro- enterprises in Malaysia. This study attempts to understand those that will be potential loan borrowers and members of microcredit scheme who value the facilitating programs to develop their business. METHOD A series of field surveys were conducted using stratified random sampling in selecting micro enterprises in 2015. Face to face interviews was carried out using structured questionnaire for gathering needed information among selected micro enterprises Kuala Selangor, Hulu Langat, and Gombak in Selangor. Two hundred 200 entrepreneurs were interviewed, those who take loans from banks, financial organization and types of microcredit schemes that do not provide ETMP. In order to clarify the characteristics of entrepreneurs having the intention to become members of microcredit scheme with training and programs in future, descriptive and binary logistic regression analysis were applied. Descriptive analysis characterizes the demographic profile of entrepreneurs interviewed. Binary logistic regression was applied to reveal the determinants of entrepreneurs’ intention in becoming members of microcredit scheme with ETMP. Y represents “entrepreneurs having the intention to become members of microcredit scheme with ETMP” coded as one and “no intention to become a member of microcredit scheme with ETMP” coded as zero. The equation of the logit model is shown as follows: Logit Y = natural log odds = lnπ1 − π = α + βx; Rika Terano, Zainalabidin Mohamed and Fatin Najiha Mohd Tammili 253 Where: -Y is having intention to become member of microcredit scheme with ETMP = 1, not having intention = 0, -X 1 is entrepreneurs’ age; 0 = above 40 years old, 1 = below 40 years old, -X 2 is entrepreneurs’ marital status; 1 = married, 0 = single, -X 3 is entrepreneurs’ education; 1 = above secondary school, 0 = below secondary school, -X 4 is period the micro-enterprise has been receiving loan; in years, and -X 5 is women entrepreneursworkers involved in business; 0= No, 1=Yes, -X 6 is business size improvement before and after receiving loan; 0= No, 1=Yes, -X 7 is on time repayment if entrepreneurs are with loans; 0= No, 1=Yes. RESULT AND DISCUSSION By conducting face to face interview among micro-enterprises, series of surveys were conducted to collect data from 200 enterprises Kuala Selangor, Hulu Langat, and Gombak in Selangor. Micro enterprises which belonged to agro- based industry accounted for more than half of the interviewed enterprises 56 while the remaining 87 enterprises 44 belong to non-agro based industry as shown in Figure 2. Those entrepreneurs working as micro enterprises in the agro- based products are managing grocery store or peddling grocer of fresh chicken, vegetable, fruits and food including own products. The remaining enterprises belonged to non agro-based products including mechanics shops for motorcycle and car, barbers, tailor shops and various non-agro based businesses. Among the 200 enterprises, 77 of them 38 obtain loans for their business from financial institutions such as TEKUN and others and 123 enterprises 62 does not take any loan as shown in Figure 3. The SME bank, Agro Bank, and TEKUN are lenders for the enterprises however their financing services are without training and no program is provided for the borrowers. Figure 2. The ratio of 200 micro enterprises between agro-based and non-agro based industry. Figure 3. The ratio of micro enterprises based on the presence of loans for their business. CONCLUSION Table 1 shows the demographic profile of the respondents from micro enterprises. The majority of the respondents 64.0 128 respondents are above 30 years old while the rest 36.0 72 respondents are below 30 years old. There are 132 66.0 married respondents and the rest are single. Majority of the respondents have completed secondary school. About 69 respondents 34.5 confirmed the involvement of women entrepreneurs and workers in their business. In terms of Product No. Percentage Agro based products 113 56 Non agro-based industry 87 44 Presence of loan No. Percentage Taking loan 77 38 No loan 123 62 254 improvement in profit or business size, about 137 respondents 68.5 answered no to improvement in their business after obtaining loans. In terms of repayment, the respondents who pay back their debt on time are limited to 60 respondents 30.0 while majority of the respondents often delayed timely repayment. The average period of the time respondents have been involved in their business is 5.23 years. In terms of having the intention to become a member of microcredit scheme with ETMP, 87 respondents 43.5 answered having intention. Table 1. Demographic profile and attitudinal characteristics towards microcredit loans Demographic profile No. Age below 30 years old 72 36.0 above 30 years old 128 64.0 Marital status married 132 66.0 single 68 34.0 Education below secondary school 162 81.0 above secondary school 38 19.0 Wifefemale involved in business Yes 69 34.5 No 131 65.5 Business size improvement Yes 63 31.5 No 137 68.5 On-time repayment Yes 60 30.0 No 140 70.0 Period of the business Years 5.23 years - Having intention to become member of microcredit scheme with facilitating programs Yes 87 43.5 No 113 56.5 Source: Own survey The main factors influencing the intention to join the microcredit institutions providing ETMP were identified by binary logistic regression. In the analysis, the overall classification accuracy was 70.5 per cent with the adequate level of predictive accuracy. The estimated coefficient and statistical significance levels for the logistic regression are shown in Table 2. The results of the binary logistic regression indicate that three of the variables are statistically significant with positive signs. Based on the demographic profile of the respondents, marital status, and the gender were identified as important factors in influencing the micro entrepreneurs to obtain loans from financial institutions with ETMP. Respondents from micro- enterprise where women are involved as entrepreneurs or workers are 2.840 times more likely to have the intention to become members of the microcredit scheme with ETMP. It may be due to the characteristics of microcredit scheme represented by AIM that most of the borrowers are women. Following Grameen bank footstep, AIM tries to develop woman empowerments among micro-enterprises. In terms of attitude towards repayment, those respondents who keep to the due date of the repayment tends to have the intention to join financial institutions with ETMP. On- time repayment requires the entrepreneurs’ mindset motivation and strong responsibility as borrowers. In comparing respondents who often pay back late and those that do not obtain loans, they are 1.619 times more likely to have the intention to be members of the microcredit scheme with facilitation training and programs. Also, the respondents who obtained loans are 1.864 times more likely to have intention. With women’s involvement in business and on time repayment variable, educational background of respondents is one of the determinants of intention to join Rika Terano, Zainalabidin Mohamed and Fatin Najiha Mohd Tammili 255 the ETMP. The respondents with lower educational background intend to join financial institutions with ETMP. Table 2. The result of binary logistic regression for measuring intention to become a member of microcredit with program and training Overall predicted is 70.5 Source: Own survey In order to improve household income level and create equity sustainable society, entrepreneurship has an important role to play in the Malaysian economy. There are various types of loans available in Malaysia for micro enterprises to fund their business. Micro- enterprises have been given special attention from the policy maker and are being implemented in 11 th Malaysia Plan. It attempts to increase the number of skilled entrepreneurs among the micro enterprises. This study focuses on micro enterprises which are located in Kuala Selangor, Hulu Langat, and Gombak in Selangor, Malaysia in order to identify entrepreneurs who seek opportunity not only in obtaining loans but also joining ETMP. They are important in increasing skilled entrepreneurs and developing micro-enterprises in Malaysia. This study attempts to understand the potential loan borrowers and members of microcredit scheme who value ETMP to develop their business. Micro-enterprises, which belonged to agro-based industry accounted for more than half of the interviewed enterprises 56 while the remaining 87 enterprises 44 belonged to non-agro based industry. Factors such as marital status, involvement of wife and women in business, on time repayment and educational background influenced entrepreneurs’ intention to become members of microcredit scheme with facilitating training and motivational programs. These particular characteristics of the respondent as entrepreneurs’ running micro-enterprises revealed potential borrowers of microcredit financial institution with ETMP in future. REFERENCES Chamhuri, S., and Quinones, B. 2000. Microfinance in Malaysia: aiming at success. Microfinance and poverty alleviation 180-199. Department of Statistics. 2015. Small and Medium enterprises 2014 Retrieved March 9, 2016, from https:www.statistics.gov.myindex. php?r=columnpdfPrevid= YlVoaEczbld2TnJzTHljMjdvaGw0d z09 Eleventh Malaysia Plan - Micci. 2015. Retrieved March 19, 2016, from http:www.micci.comdownloads11 MP.pdf SME corporation Malaysia. n.d. Retrieved March 19, 2016, from http:www.smecorp.gov.myindex.p hpen Unit, E. P. 2015. Eleventh Malaysia Plan 2016-2020 Anchoring Growth on People . Malaysia: Prime Minister’s Department. B S.E. ExpB Age -0.176 0.385 0.647 0.838 Marital status 0.639 0.395 0.105 1.895 Education -0.737 0.425 0.083 Period of loan received 0.482 0.415 0.245 1.619 Woman involved in business 1.044 0.337 0.002 2.84 Improvement of business size -0.204 0.207 0.324 0.815 On time repayment 0.767 0.31 0.013 2.153 Constant -1.883 0.947 0.047 0.152 Sig. 256 DISCUSSION FROM PARALLEL SESSION PAPER TITTLE Micro Entrepreneurs Intention to Become Member of Microcredit Scheme with Educational Training and Motivational Program AUTHOR Rika Terano, Zainal Abidin, M, Fatin Najiha Mohd Tammili DISCUSSION QUESTION 1. Why don’t authors use actual age instead of binary choice 0 and 1 2. The same thing with entrepreneurs education, number of schooling years 3. If binary variables is used for dependent variables, econometric problems many arise when too many binary independent variables 4. Some explanation is more appropriate to be put in the result discussion not in the conclusion ANSWER SUGGESTION 1. Do not confused between result and discussion and conclusion 2. Conclusion contains only the findings of the study not discussion of the result 3. Instead of using below or above 40 4,0, use the actual age 4. No statistical data in the table 5. The slides and the paper are not consistent Development for Human Welfare 2016 257 FARMING INCOME ANALISYS OF DRY LAND IN THE GUNUNGKIDUL DISTRICT A Case Study in Prone Area Food Aris Slamet Widodo 1 , Retno Wulandari 1 Jl. Lingkar Selatan, Kasihan, Bantul Regency, Yogyakarta corresponding author: aris.swumy.ac.id ABSTRACT This research study was aimed at analizing the farmers’ income of local commodity in the village of Purwosari, Gunungkidul district. The study was purposively conducted in Giritirto village, Purwosari, Gunungkidul. This study used a basic method of analysis description focusing on cost analysis and farming income.The research findings show that farming frequently done by farmers in Giritirto village on rainy season is paddy and corn. While on dry season, they cultivate corn and peanut. The average income of farmers on the rainy at ricefield is higher than that at tegal land non irigated dry field.Corn is a major commodity in the dry season and cultivated in wet land and tegal up land. The highest income of corn is achieved at tegal land on the dry season. Peanut only planted in the dry season on dry land and is able to provide a high enough income for farmersThe analysis findings concluded that paddy commodity of ricefield has the highest income on the rainy season, while corn commodity is appropriately cultivated on the dry season at tegal land. Peanut has a quite high contribution at tegal land on the dry season. Keywords: Income, Farming, Dry Land INTRODUCTION Food needs has been a distinctive challenge for Indonesian people which is an archipelago country. The width of Indonesia geographically causes distinction of land condition as well as compatibility against kinds of crops. The different culture of farming and staple food among regions also influences people’s choice in selecting commodity of farmers. However, transition of choosing staple food from local one to nationally rice has made problems in terms of food fulfillment Nurhemi, dkk., 2014. The availability and sufficiency of field become an important factor in providing support sufficiency production in order that national food security in 15 years RPJMmid-term government plans and within the next 40 years RPJPlong- term government plans. The need of food is a function of population, income levels, and its socioeconomic. If population grows about 1,28 per year, it will need the addition of food production at least 1,3 per year to achieve the level of food security Agricultural Research and Development Agency, 2010. The increase in food production depends greatly on improvement result of ricefield productivity. The increased productivity cannot take place continuously, due to the fact that productive land ricefield gets shrink as a result of function shift, so that alternative new land is needed to develop that commodity using dry land which is still vast Mahaputra and Adijaya, 2004. Dry land is defined as a stretch of land never flooded most of the time in a year or in all time. Indonesian land with 188,2 million ha, 25,09 million ha belong to potential land to cultivate dry land-crops Djaenudin, D; Marwan, Subagyo and A. Hidayat. 2003. Dry land in Gunungkidul district has not been maximally well- managed, thus planting patterns are in food crops annuals, such as corn, cultivated on the rainy season. The district of Gunungkidul is the southernmost of Yogyakarta Special Province with 1.485,36 km 2 or 46, 63 of its total area. This area has topography of limestone hills extending from the west Aris Slamet Widodo, Retno Wulandari 258 until the east. The topography itself influences kinds of land uses in Gunungkidul district. The condition of being not so fertile and being burdened by problems of water availability makes it the poor area with annual income Rp 3,229,356. This happens because 70 of Gunungkidul residents is landless farmers with various lacks of nature, technology, and capital as well. Based on data from BPS Statistics Center Agency of Gunungkidul District 2014 that most of farming land in it is the dry one 95, while the rest is ricefield 5. According to the natural condition, Gunungkidul District has some potential plants being well-produced such as cassava, corn, soybean, and dry land- paddy. Being an extreme nature as well as categorized as marginal land cause some areas in Gunungkidul District categorized as prone to food in 2013; they are Purwosari, Paliyan and Girisubo sub- districts. Various efforts done by government in terms of food security program to anticipate food insecurity, one of which is by increasing income of local crops farming. The integrated concept of local resources between plants and livestock cows, goats, and fowls is a basic capital in terms of food insecurity management as well as f armers’ income increase. The purpose of this writing was thus to analyze farming income of local commodity in Purwosari village, the district of Gunungkidul. METHOD Basic method used in this research study was analysis descriptive method focusing on problems solution existing at present and current. Data collected were firstly arranged, explained, and then analyzed in order to make description, images or picture which is systemic, factual, and accurate considering factors, characteristics, as well as relations among the research phenomena Surakhmad, 1994. The sampling area taken was purposively determined purposive sampling which is Giritirto village, Purwosari sub-district, Gunungkidul district regarding that the village belonged to prone to food in the district, however, it has potential for developing food crops, namely corn and gogo paddy. This study employed cost analysis, income, and profit from various commodities of farming. RESULT AND DISCUSSION Farmers in Giritirto village, Purwosari sub-district, Gunungkidul district many cultivating some commodity. Most of whom, on the rainy season, cultivate paddy and corn. Besides, those on the dry season cultivate commodities of corn, cassava, tobacco, and peanut. Average possession of ricefield is around 2.706 m 2 and tegal land with 4.643 m 2 .

1. Paddy