Organic Farming as an Alternative in Improving the Economic Viability and Sustainability of Rice Farms (Study case in North Sumatra, Indonesia) Diana Chalil
and Sustainability of Rice Farms
(Study case in North Sumatra, Indonesia)
1) 2)
Diana Chalil and Riantri Barus
1)
University of Sumatera Utara
2)University of Nusa Bangsa Abstract
In 1984 the use of High Yield Varieties (HYV) regarded as success stories in tackling the
growing food needs. However, the use of HYV needs to be followed by the use of large
amount of chemical fertilizers, which then leads to an increase in fertilizer scarcity and
price. Therefore Indonesian Government provides subsidized fertilizer, especially for
important commodity such as rice. In 2014 the Indonesian Government spent US$ 1.8
million for the fertilizer subsidy. In such a condition, sustainability and economic viability
of conventional rice farming in the future is in question, and organic rice farming is then
widely discussed as an alternative. However, many farmers believe that organic farming is
less profitable because its productivity is relatively low and production costs are relatively
high. To analyze these perceptions, this study was conducted in an organic rice farming
center in North Sumatra. Viability and sustainability of organic rice farming is compared
with those of the semi-organic and conventional ones. The collected farm level data were
calculated by using 2 selling price scenarios namely (1) existing condition selling price and
(2) potential selling price, and 3 cost scenarios namely (1) existing condition expenditure,
(2) expenditure without fertilizer subsidy and (3) opportunity costs. The results show that,
except the cost of fertilizer, all cost components of conventional rice farming similar to
that of the organic rice farming. Conventional agricultural fertilizer costs only about 60%
of that of the organic farming. In fact, the difference is mainly stemmed from the
subsidized fertilizer price enjoyed by conventional rice farmers, which is least provided for
the organic ones. The average productivity of organic rice farming is only about 80% of
the conventional farming. Although the decrease in productivity is followed by the
increase in selling price, it is only about 11% and not enough as compensation. Actually,
the organic rice can be sold 2-3 times higher if the rice has been certified. In such a
condition, the ratio of the selling price and the cost per kg of the certified organic rice
could also reach more than 2 times higher than that of the conventional one, with values of
6.75 and 3.28, respectively. Therefore, it can be concluded that with proper management,
organic farming has great potential to improve the sustainability and economic viability of
rice farming.Keywords: Organic, Conventional, Rice Farming, Viability, Sustainability, Indonesia Introduction
In Indonesia, rice is the staple food for most of the 250 million population, thus rice
price and availability problems could lead to state instabilities. In relation, the Indonesian
government heavily intervenes with the rice industry, including in the pricing of fertilizer
and dry grain harvest. In 2014 the Indonesian Government spent as much as US$ 1.8
million for the fertilizer subsidy, but no significant improvement have appeared in the rice
price and supply, thus the subsidy began to be considered a burden for government
expenditures.However, cutting the subsidies will likely lead to a decrease in the Indonesian rice
production. This is indicated by the cointegrating equation estimation result of the North
Sumatra monthly Urea real price and paddy’s production data (from Ministry of
Agricultural and Statistic Indonesia, 2005-2010) shows a negative relationship between the
variables (Appendix 1). As an alternative, in 2001 the Indonesian government launched
organic farming programs which are expected to reduce the use of chemical fertilizers. The
goal is that in 2010, Indonesia will been able to produce organic rice on a large scale and
to export it. In fact, until 2013 the progress is still very slow, with no large scale organic
farms even only for supplying the domestic needs. Many farmers believe that organic
farming is less productive and less profitable, hence reluctant to apply it. Moreover,
organic rice agribusiness still faces various weaknesses and threats such as narrow land
areas, low productivity, low stage of implementation, no farm records, low income, lack of
separate rice milling drying floor and irrigation, low-quality product, lack of marketing
network and the government support, which have not been overcome, while the strength
and opportunities such as farmers’ experience, increasing demand trend, farmer groups and
non-governmental organizations supports, have not been optimized (Safitri and Chalil
2013, 14). In such conditions, the expected role of organic paddy farms in improving the
economic viability and sustainability of rice farms are questioned. This study is designed
to analyze the expected role and hopefully provide useful information for improving rice
farms’ viability and sustainability.Literature Review
Organic agriculture is an ecological production management system. This does not
mean that the products are completely free of residues, but minimizing the use of off-farm
inputs and using management practices that restore, maintain and enhance ecological
harmony (USDA 1995 in Gold 2007). It integrates various operation such as organic crop
and livestock operation and spreads the operations, therefore a good organic production
should also be economically sustainable (Kuepper and Gegner 2004). Since economic
viability is a necessary condition for sustainable agricultural and food systems (Ikerd
2007), an organic should also be economically viable. However, many organic farming has
limited economic implications, therefore, it is still questionable whether organic farming is
a viable tool to enhance farmers’ livelihood (Woranoot 2009; Chalil 2014).Viability is understood as the ability of a business to survive and prosper over a
long period, which can be measured by the level of profitability and its ability to meet
financial commitments and pay all its liabilities through its assets (Wiebe 2007). These
measurements can be influenced by various factors, such as level of subsidies and ratio of
farm input and grocery food prices. The importance of the subsidies on farms viability can
be analyzed by the impact of abolishing them. In European countries, many farms with
positive income could be negative when all subsidies are cut. On average, 75% of farms in
European countries would be viable if subsidies were to be abolished. However, the level
of dependency to subsidies appears to have huge difference among countries. The worst
country would be left less than 15% farms of the positive income if all subsidies are
removed (Johnston 2010).In Canada, depressed farm product prices are found to be the main cause of farm
viability declining. Farm input and grocery food prices have gone much faster than farm
product prices. In addition, extra costs related to the marketing demand, such as
specialized packaging, food traceability, quality assurance programs, food safety
programs, and sundry demands from processors and retailers without compensating return
could also lead to the decrease in farm viability (Scott and Colman 2008). The
compensating returns could be driven if consumers are willing to pay premium prices.
With more distance between consumers and producers, a label is needed as a guarantee,
Therefore, organic certifications become an essential factor. However, the certification
costs are not expensive and the process of certification is not simple, thus farmers need
both financial and technical supports from all stakeholders. Farms viability could also be
influenced by the farm size, off-farm income, domestic expenditure, and productivity of
crops. Among all, farm size and off-farm income appear to be the most significant
discriminating factors (Singh et al. 2009, 274).This study was conducted in Desa Lubuk Bayas, Kecamatan Perbaungan
Kabupaten Serdang Bedagai, which is purposively selected as it holds the largest organic
rice land area in North Sumatra (Bitra Indonesia 2013). The data was collected through
depth interviews with 51 organic, semi organic and conventional rice farms, comprising
land area, production, consumption, rice prices, the amount and price of labor, fertilizer,
and pesticides usage, household expenditure, and income from side jobs.Farm viability is measured by the net income, revenue-cost ratio and costs per kg
of each of the organic, semi organic and conventional farm. Selling prices are calculated in
2 scenarios namely (a) existing condition selling price and (b) potential selling price.
Potential selling prices are calculated for organic rice by using the certified organic rice
average retail price and the existing ratio of uncertified rice price at farmers’ and retails
level as follows:=
where P refers to price, the subscript u and c refer to the uncertified and certified organic
rice, and superscript f and r refer to the farmer and retail price levels. Production costs are
calculated in 3 scenarios namely (a) existing condition, (b) without subsidies and (c) with
opportunity costs. “Existing condition” refers to the actual incurred costs, “without
subsidies” refers to the total costs when all subsidies are abolished, and “opportunity
costs” include all the imputed costs including family labors, subsidies and land rent.
Sustainability is measured by the difference between the farm revenue and the total of
production costs and household expenses, and the difference between the total farm
revenue and side jobs income and the total of production costs and household expenses.
Household expenditure consists of expenditures on food, children's school needs, water,
electricity, fuel, transportation, communication, social activities and health costs. Positive
difference shows a sustainable condition, otherwise unsustainable.Results and Discussion
Lubuk Bayas is one of the rice production centers in Sumatera Utara, which has
long been a model for other rice-producing centers. Many innovative programs have been
developed in this village, including the organic rice program. Unfortunately, the
development of the organic rice program is still slow. Since it was first introduced in 2001,
only 9 farms have continuously implemented the organic system (Chalil 2014). Many are
reluctant due to the low production which in turn gives low income. In fact, the “existing
condition” calculation (scenario 1) shows that the average net income of conventional rice
appears to be higher than the semi-organic rice and organic.Table 1
Table 1 shows the net income of organic, semi-organic and conventional rice
farming in 3 scenarios. Conventional paddy net income is the highest in all scenarios,
including that “without subsidies”. On average the price of fertilizer subsidy is only about
50% of the non-subsidized, thus conventional farms expend only 50% of their imputed
fertilizer costs. This will greatly affect the net income if the share of fertilizer cost to the
total costs is significant, and the share of the subsidized fertilizer to the total fertilizer is
significant too. In fact, on average conventional farms use 93.24% of subsidized fertilizers,
while that of the semi organic and organic farms only 49.69% and 18.80%, respectively
(Figure 1).Figure 1
Organic farms only receive subsidized petroganic fertilizer. They expend
IDR 362.179,-/ha (US$ 30.80/ha) and IDR 732.906,-/ha (US$ 62.32/ha) for the subsidized
and non subsidized farms, respectively. In addition, organic farmers still need an additional
expenditure as much as IDR 1.564.153,-/ha (US$ 133.01/ha) for manure, which none
being subsidized. In total they use around 5.5 tons/ha organic fertilizer/ha, whereas the
recommended amount is 6 tons/ha. On average the organic farms only use less than
IDR 400.000,-/ha (US$ 34.01/ha) of the subsidized fertilizer, while that of the
conventional reach more than IDR 1,000,000/ha (US$ 85.03/ha). In total, the conventional
farms expand more than IDR 3,000,000/ha (US$ 255.10/ha) on fertilizer cost, while the
organic ones only around IDR 1,000,000/ha (US$ 85.03/ha). All of these show that organic
farming could reduce the subsidized dependency in rice farms.However, abolishing fertilizer subsidies is unlikely to change the net income of
each farm system. In conventional farms, fertilizer only contributes 16.83% of the total
costs, thus its net income in scenario 2 is still higher than that of the organic farms (Figure
2). Therefore, it can be said that in terms of expenditure organic and conventional farms do
not severely depend on the subsidies.Figure 2
In terms of composition, most farmers tend to use the same type of fertilizers with
those of the subsidized ones. In this case, conventional farmers receive 4 subsidized
fertilizers, namely Urea, ZA, SP 36 and NPK, while Ministry of Agriculture Republic of
Indonesia recommends a composition of NPK, Urea, SP36 and KCL. Urea and ZA contain
the same main ingredient, Nitrogen, while NPK have Kalium in the form of KCl. All
farmers use Urea, and more than 70% use SP36 and ZA, while only less than 20% farmers
use KCL (Figure 3). This is likely due to a longer and observable impact of not using Urea,
SP 36 or ZA, such as disruption of crop growth, yellowing leaf and inhibition of grains’
formation. In contrast, the effects of KCl that are more apparent only at the time of harvest,
such as the breakage of paddy straw. Moreover, without subsidy, KCL price is much
higher than Urea and SP 36.
Figure 3
In general, farmers do not know the recommended amount of each fertilizer.
Instead, the usage is influenced by the subsidized fertilizers’ supply or their financial
condition to buy the fertilizers. Table 2 shows the comparison between the fertilizer usage
and recommendation.
Table 2
Many suggested that as a trade off to reduce fertilizer costs, organic farms needmore labor usage, hence expend more on labor costs. In fact, Table 3 shows that no
significant difference is indicated among the organic, semi organic and conventional labor
costs, with a total value around IDR 5 million/ha (US$ 425.17). However, most organic
farms use a large amount of family labor. While the semi-organic and conventional farms
use less than 10% of family labor, that of organic farms use more than 50%.
Table 3
The main reason for using more family labor is to reduce the production costs,since organic farms give fewer revenues. However, the family labor usage might also
affect the productivity for at least for two reasons. First, in general paid workers are more
specialized thus more effective than family labor. Second, family labor need to handle
various works within larger areas, thus might affect the quality of their works. In fact, in
this case the average productivity in organic rice farming is only about 80% of the
conventional farming.
Table 4
Table 4 shows that organic rice productivity can reach 7.5 tons/ha, which is equalto the average productivity of conventional rice, but not many can reach it. In theory the
transition from conventional to organic farming systems will initially cause a decrease in
the level of productivity. Herawati et al. (2014) suggested that the transition period will at
least take about 2-3 years. On average, organic rice farmers in Lubuk Bayas have
implemented organic farming for more than 4 years. Therefore, theoretically, it should
pass the transition period production level, but this is not the case.In addition, Amala dan Chalil (2013) indicated that other factors that might cause
the low productivity of organic rice stems from the inappropriate usage of supplementary
fertilizer. Some farmers reduce the amount to less than recommended, as transporting the
fertilizers need some additional labor costs. Currently, no sizeable road is provided for
vehicles to deliver the fertilizer until the farm sites. Similar things appear in the pesticides
usage, which are reduced due to the lack of supply. Currently, no production input shop
provides the organic pesticides, therefore farmers need to make their own or buy it from
other farmers. In fact, collecting the raw materials for organic pesticides needs additional
time, while farmers often do not have enough time. Moreover, farmers suggest that the
organic pesticides usage is not effective, because it only temporarily repels pests while
many organic farm locations are still not fully separated with the organic ones (Figure 4).
Figure 4
The decrease in organic farm productivity has been compensated by the increase in
selling price. However the increase is only about 11% or IDR 4,311,- (US$ 0.37)/kg
compared to IDR 3,868,-/kg (US$ 0.33/kg) of the conventional price, which is not enough
as compensations. Actually, the organic rice can be sold 2-3 times or IDR 9,800/kg (US$
0.83/kg) higher if the rice has been certified. However, the certification process is not easy
and needs supports from all stakeholders in all the rice agribusiness subsystems. For
example, organic farms in Lubuk Bayas still use the same irrigation channels with the
conventional ones. Addressing this needs a re-allocation of each different farming system
in a stretch of land area, or builds a separate irrigation for the organic farms. Both cannot
be carried merely by farmers. Such a condition makes some farmers reluctant to
implement the organic farming system in a larger scale.Without including the fertilizer subsidy (scenario 2), production cost for organic
farm is still higher than the semi organic and conventional due to lack of fertilizer subsides
and the imputed labor costs. In detail, the production cost per kg for organic, semi organic
and conventional system for the 3 scenarios can be seen in Table 5.
Table 5
With such cost conditions, the value of R/C ratio for the three types of farmingsystems in the 3 scenarios can be calculated in 2 selling price namely the existing and
potential prices. Table 6 shows that the R/C ratio for the existing selling price is greater
than one in all the 3 scenarios.Table 6
In existing condition (scenario 1) organic R/C ratio is lower than the conventional
ones. Similar condition appears in the “opportunity costs” (scenario 3), since the organic
use much higher family labor imputed costs. In contrast, organic R/C ratio “without
subsidies” (scenario 2) is slightly higher than the conventional, showing its less
dependency on the fertilizer subsidy.The results dramatically change when the revenue is calculated with the potential
selling price. The organic R/C ratios increase far above the conventional R/C ratios in all
scenarios, indicating the importance of certification in improving the viability and
sustainability of organic rice farms.
Table 7
If using common criteria, R/C ratio> 1 indicates a feasible condition. In fact, theR/C> 1 only shows an ability to cover the production costs from the generated revenues. In
fact, as a main income source, the farm revenue is not only expected to cover the
production costs but also the household expenditure. Otherwise, parts that is supposed to
be distributed for production costs could be used for household expenditure. If such a
condition continues, the farms sustainability would be threatened.Table 8
Table 8 shows that in all scenarios the revenue derived from rice farming has not
been able to meet all expenses for the cost of production and household consumption.
Household consumption expenditure is much larger than that of the production costs.
However, with an additional income from side jobs, farmers can cover all of their cost
production and household expenditures; even if the subsidies are abolished (scenario 2) or
the imputed cost are calculated (scenario 3). However, with seasonal farms’ harvest versus
a daily base of household expenditures, some farmers require additional loan capital as can
be seen in Figure 5.
Figure 5
In such a condition farmers still plant rice for over 21 years because the rice is alsoused for their household consumption (Table 9). Many organic farmers even grow organic
rice only for their family’s consumption, as they believe that organic rice is better for
health than the conventional one.Table 9 Conclusion and Recommendation
While there are great potentials of organic farming in improving the viability,
which in turn the sustainability of rice farms, a number of conditions need to be improved.
This need to be done through all aspects, including production, selling price, and input
provision and price. The development of organic inputs’ industry could improve their
availability and price, which in turn is expected to reduce the production costs and increase
the organic paddy production. To do so, full commitment of all stakeholders, including the
government, researchers and investors is indispensable. The support of price certification
could significantly improve the organic rice selling price. The government with all its
related ministries could assist technically and financially. This includes the provision of all
required infrastructures, such as a separate irrigation for the organic paddy fields.No Scenario Organic Semi-organic Conventional
1 existing condition 11,164,329 (US$ 949.35) 11,714,860.23
(US$ 996.16) 14,345,834.89 (US$ 1,219.88) 2 without subsidies
10,793,60239 (US$ 917.82) 10,593,725.37 (US$ 900.83)
13,201,768.33 (US$ 1,122.05) 3 with opportunity costs 5,384,111.81
(US$ 457.83) 5,551,035.54 (US$ 472.03) 8,041,154.29
(US$ 683.77) Note: Exchange rate: USD 1 = IDR 11.760 Organic
No Existing Condition Without subsidies With opportunity costs Revenue (IDR/ha/ season) Cost (IDR/ha/ season) Net Income (IDR/ha/ season) Revenue (IDR/ha/ season) Cost (IDR/ha/ season) Net Income (IDR/ha/ season) Revenue (IDR/ha/ season) Cost (IDR/ha/ season) Net Income (IDR/ha/ season)
1 13,500,000 7,377,500 6,122,50013,500,000 7,377,500 6,122,500.0013,500,000.0013,827,500.00 (327,500.00) 2 27,687,500 7,059,028 20,628,47227,687,500 7,059,028 20,628,472.2227,687,500.0012,550,694.44 15,136,805.56 3 21,086,538 7,629,808 13,456,73121,086,538 7,629,808 13,456,730.7721,086,538.4612,793,269.23 8,293,269.23 4 22,500,000 7,683,929 14,816,07122,500,000 7,683,929 14,816,071.4322,500,000.0013,033,928.57 9,466,071.43 5 20,936,250 6,705,000 14,231,25020,936,250 6,705,000 14,231,250.0020,936,250.0012,205,000.00 8,731,250.00 6 30,250,000 6,910,417 23,339,58330,250,000 6,910,417 23,339,583.3330,250,000.0011,747,916.67 18,502,083.33 7 7,500,000 6,231,250 1,268,750 7,500,000 6,675,694 824,305.56 7,500,000.0011,509,027.78 (4,009,027.78) 8 24,725,000 10,615,625 14,109,37524,725,00014,990,625 9,734,375.0024,725,000.0020,965,625.00 3,759,375.00 9 17,214,286 6,174,405 11,039,88117,214,286 6,174,405 11,039,880.9517,214,285.7112,304,761.90 4,909,523.81 10 22,140,000 6,589,500 15,550,50022,140,000 6,589,500 15,550,500.0022,140,000.0011,584,500.00 10,555,500.00
11 9,000,000 6,286,250 2,713,750 9,000,000 6,286,250 2,713,750.00 9,000,000.0011,711,250.00 (2,711,250.00) 12 7,875,000 15,132,500(7,257,500) 7,875,00015,132,500(7,257,500.00) 7,875,000.0020,307,500.00(12,432,500.00) 13 21,044,118 5,927,206 15,116,91221,044,118 5,927,206 15,116,911.7621,044,117.6510,924,264.71 10,119,852.94
Average 18,881,438 7,717,109 11,164,32918,881,438 8,087,835 10,793,602.3918,881,437.8313,497,326.02 5,384,111.81 Semi-organic
No Existing Condition Without subsidies With opportunity costs Revenue (IDR/ha/ season) Cost (IDR/ha/ season) Net Income (IDR/ha/ season) Revenue (IDR/ha/ season) Cost (IDR/ha/ season) Net Income (IDR/ha/ season) Revenue (IDR/ha/ season) Cost (IDR/ha/ season) Net Income (IDR/ha/ season)
1 11,550,000 6,014,000 5,536,000 11,550,000 6,871,500 4,678,500 11,550,000 11,746,500 (196,500) 2 31,250,000 8,342,578 22,907,422 31,250,000 9,319,141 21,930,859 31,250,000 14,178,516 17,071,484 3 26,250,000 7,999,444 18,250,556 26,250,000 8,076,944 18,173,056 26,250,000 12,826,944 13,423,056 4 24,000,000 9,023,333 14,976,667 24,000,000 10,265,833 13,734,167 24,000,000 15,110,278 8,889,722 5 20,986,111 8,337,103 12,649,008 20,986,111 9,824,603 11,161,508 20,986,111 14,699,603 6,286,508 6 21,307,432 7,848,649 13,458,784 21,307,432 8,913,649 12,393,784 21,307,432 13,993,378 7,314,054 7 20,895,000 8,258,500 12,636,500 20,895,000 9,523,500 11,371,500 20,895,000 14,543,500 6,351,500 8 15,400,000 8,510,000 6,890,000 15,400,000 9,882,500 5,517,500 15,400,000 15,032,500 367,500 9 22,200,000 8,385,000 13,815,000 22,200,000 9,695,000 12,505,000 22,200,000 14,970,000 7,230,000 10 17,563,000 7,960,100 9,602,900 17,563,000 9,035,100 8,527,900 17,563,000 14,125,100 3,437,900
11 22,440,000 7,991,000 14,449,000 22,440,000 9,058,500 13,381,500 22,440,000 13,933,500 8,506,500 12 18,841,667 7,959,167 10,882,500 18,841,667 9,129,167 9,712,500 18,841,667 14,287,500 4,554,167 13 21,880,000 8,715,000 13,165,000 21,880,000 9,922,500 11,957,500 21,880,000 14,897,500 6,982,500 14 19,400,000 7,910,000 11,490,000 19,400,000 9,115,000 10,285,000 19,400,000 14,540,000 4,860,000
Existing Condition Without subsidies With opportunity costs Net Net Net Revenue Cost Revenue Cost Revenue Cost No Income Income Income
(IDR/ha/ (IDR/ha/ (IDR/ha/ (IDR/ha/ (IDR/ha/ (IDR/ha/
(IDR/ha/ (IDR/ha/ (IDR/ha/season) season) season) season) season) season)
season) season) season)15 19,337,500 7,902,500 11,435,000 19,337,500 9,045,000 10,292,500 19,337,500 14,132,500 5,205,000 16 19,005,000 7,893,500 11,111,500 19,005,000 9,088,500 9,916,500 19,005,000 14,133,500 4,871,500 17 6,000,000 9,260,625 (3,260,625) 6,000,000 10,425,625 (4,425,625) 6,000,000 15,988,125 (9,988,125) 18 19,104,167 8,042,292 11,061,875 19,104,167 9,122,292 9,981,875 19,104,167 14,059,792 5,044,375 19 19,823,276 8,298,017 11,525,259 19,823,276 9,638,017 10,185,259 19,823,276 14,564,741 5,258,534
Average 19,854,376 8,139,516 11,714,860 19,854,376 9,260,651 10,593,725 19,854,376 14,303,341 5,551,036
Conventional
Existing Condition Without subsidies With opportunity costs Net Net Revenue Cost Revenue Cost Net Income Revenue Cost No Income
Income (IDR/ha/ (IDR/ha/ (IDR/ha/ (IDR/ha/ (IDR/ha/ (IDR/ha/ (IDR/ha/ (IDR/ha/ (IDR/ha/ season) season) season) season) season) season) season) season) season)
1 24,325,658 7,900,965 16,424,693 24,325,658 8,725,965 15,599,692.98 24,325,658 13,600,965 10,724,693
2 20,965,909 7,451,894 13,514,015 20,965,909 8,208,712 12,757,196.97 20,965,909 13,633,712 7,332,197
3 24,375,000 7,894,667 16,480,333 24,375,000 8,969,667 15,405,333.33 24,375,000 13,844,667 10,530,333
4 34,178,571 9,896,429 24,282,143 34,178,571 10,838,393 23,340,178.57 34,178,571 15,781,250 18,397,321
5 21,575,000 7,505,114 14,069,886 21,575,000 8,782,614 12,792,386.36 21,575,000 13,407,614 8,167,386
6 26,562,500 8,268,750 18,293,750 26,562,500 9,793,750 16,768,750.00 26,562,500 14,743,750 11,818,750
7 22,857,500 7,018,512 15,838,988 22,857,500 7,385,179 15,472,321.43 22,857,500 12,293,512 10,563,988
8 21,000,000 7,719,000 13,281,000 21,000,000 8,554,000 12,446,000.00 21,000,000 13,339,000 7,661,000
9 17,380,000 8,269,167 9,110,833 17,380,000 9,021,667 8,358,333.33 17,380,000 13,496,667 3,883,333
10 17,700,000 6,273,889 11,426,111 17,700,000 7,161,389 10,538,611.11 17,700,000 12,378,056 5,321,944
11 21,000,000 8,319,792 12,680,208 21,000,000 10,332,292 10,667,708.33 21,000,000 15,538,542 5,461,458
12 21,462,500 7,951,667 13,510,833 21,462,500 8,901,667 12,560,833.33 21,462,500 14,766,667 6,695,833
13 18,375,000 6,745,573 11,629,427 18,375,000 7,886,198 10,488,802.08 18,375,000 13,165,365 5,209,635
14 13,020,000 6,941,250 6,078,750 13,020,000 9,081,250 3,938,750.00 13,020,000 15,537,500 (2,517,500)
15 26,425,000 6,618,056 19,806,944 26,425,000 7,576,389 18,848,611.11 26,425,000 12,938,889 13,486,111
16 29,250,000 7,950,625 21,299,375 29,250,000 9,305,625 19,944,375.00 29,250,000 14,250,625 14,999,375
17 17,857,143 6,541,071 11,316,071 17,857,143 7,558,929 10,298,214.29 17,857,143 12,928,571 4,928,571
18 20,800,000 7,330,000 13,470,000 20,800,000 8,795,000 12,005,000.00 20,800,000 14,095,000 6,705,000
19 17,395,000 7,337,500 10,057,500 17,395,000 8,792,500 8,602,500.00 17,395,000 13,982,500 3,412,500
Average 21,921,304 7,575,469 14,345,835 21,921,304 8,719,536 13,201,768.33 21,921,304 13,880,150 8,041,154
Organic Semi organic Conventional
Figure 1 Subsidized and Non Subsidized Fertilizer Usage
Organic Semi organic Conventional Subsidize Without subsidize Subsidize Without subsidize Subsidize Without subsidize
Subsidized fertilizer 362,179 732,906 1,028,322 2,149,457 1,188,730 2,332,796
Other fertilizer 1,564,153 1,564,153 1,041,031 1,041,031 86,203 86,203
Total 1,926,333 2,297,059 2,069,353 3,190,488 1,274,933 2,418,999 18,80 %
81,20 % Subsidize Non subsidize 49,69
% 50,31 %
Subsidize Non subsidize
93,24 % 6,76%
Subsidize Non subsidize
Organic Semi organic Conventional
Figure 2 Fertilizer Cost Share
Organic Semi organic Conventional Subsidize Without subsidize
Subsidize
Without subsidize Subsidize Without subsidizeFertilizer 1,926,333 2,297,059 2,069,353 3,190,488 1,274,933 2,418,999 Others 5,790,776 5,790,776 6,070,163 6,070,163 6,300,536 6,300,536
Total production cost 7,717,109 8,087,835 8,139,516 9,260,651 7,575,469 8,719,536 24,96 %
75,04 % Fertilizer Others 25,42
% 74,58 %
Fertilizer Others
16,83 % 83,17 %
Fertilizer Others
Types Semi-organic Conventional Usage Recom. 1) Ratio Existing Recom. 1) Ratio
75.00 50.00 - 200.00 200.00 -
66.07
95.74 75.00 218.19 194.69 132.74
Average 182.07 141.67
75.00 100.00 - 225.00 175.00 125.00 - 19 250.00 75.00 100.00 - 200.00 200.00 125.00 -
50.00 17 200.00 - 87.50 - 267.86 178.57 - - 18 150.00
75.00 - 250.00 250.00 - - 13 175.00 150.00 100.00 - 312.50 208.33 - - 14 200.00 125.00 100.00 - 250.00 250.00 250.00 - 15 225.00 - 100.00 - 104.17 104.17 104.17 - 16 200.00 100.00 75.00 - 375.00 125.00
75.00 10 150.00 150.00 100.00 - 125.00 250.00 - - 11 175.00 150.00 65.00 - 375.00 375.00 - - 12 200.00 175.00
83.33 - - - 8 175.00 200.00 125.00 - 200.00 175.00 - - 9 225.00 150.00 125.00 - 175.00 175.00
89.29 5 225.00 175.00 125.00 - 225.00 125.00 100.00 - 6 175.00 175.00 100.00 - 250.00 125.00 125.00 - 7 200.00 175.00 125.00 -
75.00 75.00 223.21 267.86 -
50.00 2 234.38 - - - 204.55 170.45 - - 3 25.00 - - - 100.00 150.00 100.00 - 4 225.00 175.00
Urea 182.07 225.00 0.81 218.19 250.00
0.87 SP 36 141.67
1
KCl (kg)
Urea (kg) SP36 (kg) NPK (kg) KCl (kg)Ministry of Agriculture Republic of Indonesia No Semi-organic Conventional Urea (kg) SP36 (kg) NPK (kg)
1.32 Source: 1)
50.00
66.07
2.50
30.00
75.00
1.95 KCL
50.00 2.83 194.69 100.00
50.00
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
100% Urea SP 36 ZA KCl NPK
100% 79%
68% 5%
89% 0%
10% 20% 30% 40% 50% 60% 70% 80% 90%
100% Urea SP 36 ZA KCl NPK
100% 95%
79% 21%
37%
Semi organic Conventional Figure 3 Farmers’ Composition based on the Use of Fertilizers
- (US$ 0.00)
- (US$ 0.00)
- (US$ 0.00)
- (US$ 0.00)
- (US$ 0.00)
- (US$ 0.00)
- (US$ 0.00)
- (US$ 0.00)
- (US$ 0.00)
- (US$ 0.00)
- (US$ 0.00)
- (US$ 0.00)
- (US$ 0.00)
- (US$ 0.00)
Harvesting
2,316,069.98 (US$ 196.94)
2,574,532.35 (US$ 218.92)
2,463,915.24 (US$ 209.52)
Sub Total 584,234.71
(US$ 49.68)
4,525,339.23
(US$ 384.41)
185,471.26
(US$ 15.77)
4,936,793.53
(US$ 419.80)
410,964.91
(US$ 34.95)
4,795,088.62
(US$ 407.75) %
11.43
88.57
3.62
96.38
7.89
(US$ 4.74)
Pesticides 55,769.23
(US$ 15.22) Making
(US$ 2.63) 58,358.40
Activity Average Labor Costs Organic Semi Organic Conventional
family labor paid labor family labor paid labor family labor paid labor Land tillaging
1,000,000.00 (US$ 85.03)
1,078,289.47 (US$ 91.69)
1,032,236.84 (US$ 87.78)
Nursing 112,014.36
(US$ 9.53) 26,923.08
(US$ 2.29) 68,029.87
(US$ 5.78 30,870.73
(US$ 4.96) 17,325.36
(US$ 29.98) 178,979.60
(US$ 1.47) Planting
1,105,769.23 (US$ 94.03)
1,118,421.05 (US$ 95.10)
1,102,631.58 (US$ 93.76)
Maintaining 416,451.11
(US$ 35.41) 76,576.94
(US$ 6.51) 117,441.38
(US$ 9.99) 134,679.92
(US$ 11.45) 352,606.52
92.11 Note: Exchange rate: USD 1 = IDR 11.760
Season Organic Semi-organic Conventional average range average range Average Range
5.00
7.34
6 0.74 5,430.00 4,505.00
6.15
8.43
5 2.52 21,240.00 15,510.00
6.00
6.25
4 1.80 11,250.00 10,800.00
7.50
7 1.00 7,200.00 6,450.00
3 0.48 3,600.00 2,400.00
7.81
9.38
2 0.64 6,000.00 5,000.00
3.75
5.00
1 2,00 10,000.00 7,500.00
5.38 Semi-organic No Land area (ha) Production (kg) Productivity (ton/ha) Rainy Dry Rainy Dry
6.09
7.20
0.47 2,843.85 2,648.46
11 1.00 7,260.00 6,250.00
5.95
7.20
13 1.00 7,200.00 5,950.00
5.85
7.02
12 0.60 4,212.00 3,510.00
6.25
7.26
5.82
6.45
7.07
10 0.50 3,534.00 2,909.00
6.55
7.55
9 0.40 3,020.00 2,620.00
5.80
6.60
8 0.40 2,640.00 2,320.00
5.89
Rainy 5.89 2.92 - 7.50 7.08 5.00 - 9.38 7.44 5.25 - 10.71 Dry 5.38 3.06 - 7.50 5.83 3.75 - 7.81 6.12 4.25 - 10.36
Average
3 0.52 3,500.00 3,000.00
5.50
6.00
5 0.20 1,200.00 1,100.00
5.00
7.50
4 0.20 1,500.00 1,000.00
5.77
6.73
6.50
6.25
6.75
2 1.44 9,720.00 9,360.00
5.50
5.70
1 0.20 1,140.00 1,100.00
6.78 Organic No Land area (ha) Production (kg) Productivity (ton/ha) Rainy Dry Rainy Dry
6.46
5.64
6 0.40 2,500.00 2,600.00
6.50
5.65
5.82
13 0.68 3,840.00 3,500.00
3.75
4.50
12 0.20 900.00 750.00
4.00
4.50
11 0.20 900.00 800.00
5.32
10 1.00 5,820.00 5,320.00
7 0.36 1,050.00 1,100.00
6.43
6.79
9 0.28 1,900.00 1,800.00
7.50
7.50
8 0.40 3,000.00 3,000.00
3.06
2.92
5.15 Average
Production (kg) Productivity (ton/ha) Land area No (ha) Rainy Dry Rainy Dry
14 0.40 2,760.00 2,260.00
6.90
5.65
15 0.80 5,820.00 4,820.00
7.28
6.03
16 1.00 7,080.00 5,830.00
7.08
5.83
17 0.16 840.00 640.00
5.25
4.00
18 0.96 6,840.00 5,640.00
7.13
5.88
19 1.16 8,340.00 6,890.00
7.19
5.94 Average
0.92 6,540.32 5,358.11
7.08
5.83 Conventional Production (kg) Productivity (ton/ha) Land area No (ha) Rainy Dry Rainy Dry