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Institutional Analysis of Agribusiness Marketing in North Sumatra
Agriculture Production Center
Faculty of Agriculture, Program Study of Agribusiness, Islamic University of North Sumatera,
Jalan KaryaWisata Gedung Johor Medan, Indonesia
Keywords: Institutional, Marketing, Agribusiness, Production Centers, Multiple Regression.
Abstract: Farmers are still difficult to escape from intermediary traders. They are often as the smallest party in the
marketing system of agricultural production centers. The objectives of this research is to identify various
forms of agribusiness marketing institutions, to analyze the factors that influence the use of agribusiness
centers, and to develop model for agribusiness marketing institutional development policies. The research
populationsarefarmers, traders and consumers in 6 regencies in North Sumatra. Sample was collected using
convenience sampling and snowball sampling methods. There are 130 farmers 50 traders, 6 commodities
namely: rice, corn, cabbage, red chili, orange and meat with. The data wereanalyzed by using multiple
regression method. Parameters such asfarmer’sage, education level, farmer’sknowledge on agribusiness
centers, farmers’informal ties with nonagribusinesscenter institutions and farmers participation in
counseling havepositive value, while products volume and distance to agribusiness center have negative
value.Farmer’s decision to utilize the agribusiness center was significantly influenced by farmer’s
knowledge on the agribusiness center and informal ties with non agribusiness center institutions. Marketing
institutions in this agriculture production centers are establishment of agribusiness units by involving input
traders, farmer groups,and tradersunder the same management control, the development of production and
commodity markets information systems and partnership development.
1 INTRODUCTION
Marketing institutions in agricultural commodities
are including farmers, collector,
intermediary/wholesaler traders and retailers
(Kuma'at, 1992). Problems that faced by marketing
system is among other inefficient marketing
activities, that is not yet able to deliver agricultural
product from farmers to consumers at a low cost and
provide fair compensation from the last total
consumer price to all participant parties in
production and marketing of agricultural
commodities. Such fair distribution is remuneration
distribution of marketing functions according to the
contribution of each marketing institution
(Mubyarto, 1989).
As so far, process of production and commodity
handling still emphasizes on individual abilities and
skills. Processes that involving some institutions
such as organization, norms or the arrangements, are
generally still focused on collecting and marketing
process at certain scale. For most regions,roles of
agricultural institutions and farmers do not exist yet.
In fact, there are various functions of agricultural
institutionsincluding as driver, collectors and
suppliers of production facilities, generating interest
and attitudes, and others.
Due to the reason, one of agribusiness
development problems in agriculture production
center in North Sumatra is the institutions have not
functioned and run as they should in the agribusiness
system. On the other hand, the existence of
agricultural institutions is a necessity and
prerequisite for the success of agribusiness activities.
Through agribusiness system implementation, it is
expected that there will be optimal integration
among strategic agribusiness subsystems namely the
subsystem of means of production, production
processes, post-harvest and commodity processing
and marketing.
The purpose of this study is to: 1) Identify the
form or model of agribusiness marketing institution
in agriculture production centers of North
Sumatra.2) identify the factors that influence the use
182
Riyadh, M.
Institutional Analysis of Agribusiness Marketing in North Sumatra Agriculture Production Center.
DOI: 10.5220/0008887101820187
In Proceedings of the 7th International Conference on Multidisciplinary Research (ICMR 2018) - , pages 182-187
ISBN: 978-989-758-437-4
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