Factors that Affect Fishermen's Income with Fuel Cost as Moderating

Variable

Inge Lengga Sari Munthe, Fatahurrazak, Rizki Yuli Sari, Ronia Tambunan and Jack Febriand Adel

Faculty of Economics and Business Maritime, Accounting Department, Tanjungpinang, Indonesia

jackfebriandadel@umrah.ac.id

Keywords: Fishermen's Income, Work Experience, Consumption Costs, Labour Costs, Fuel Costs.

Abstract: This research discusses factors influencing fishermen's income with fuel costs as a moderating variable.

Sampling used a purposive sampling technique and obtained 52 research samples. Data collection was carried

out by collecting primary data with interviews, surveys and observations. The statistical test used is Moderated

Regression Analysis. The results of this research are (1) work experience simultaneously and partially

influences fishermen's income, (2) consumption costs simultaneously and partially influence fishermen's

income, (3) labour costs simultaneously and partially influence fishermen's income, (4) Fuel costs

simultaneously and partially influence fishermen's income. (5) Fuel costs can moderate the influence of

consumption costs on fishermen's income. (6) Fuel costs can moderate the influence of labour costs on

fishermen's income. (7) Fuel costs cannot moderate the effect of work experience on fishermen's income. Our

findings can provide insight into increasing fishermen's income.

1 INTRODUCTION

The total land area of the Bintan Regency is

88,038.54 km2. The oceans surrounding Bintan cover

an area equal to 86,092.41 km2 of the island's total

land area. It means that Bintan's water area is 98% of

the total. The district of Bintan spans a total size of

88,038.54 km2 in its entirety. However, its land area

is only 2.21%, equivalent to 1,946.13 km2. The

remaining 86,092.41 km2 is water. With the vastness

of Bintan's waters, fishermen can catch more marine

products.

According to Act No. 45/2009, fishermen are

people whose livelihood is fishing. Fishermen play a

crucial role in the community as they fulfil animal

protein intake at all levels of society. It concerns the

fulfilment of animal protein intake at all levels of

society. In order to maximize the catch, the welfare of

fishermen also needs to be considered. Fishermen's

income depends on the potential exploitation of

marine and fish resources in the ocean. Fishing is the

main source of income for his family.

The income of fishing communities influences,

directly or indirectly, the quality of life of fishermen.

Fishermen's income level has a big impact on their

lives. It is also related to environmental management

and coastal development based on existing local

wisdom that has long been rooted in fishing

communities.

Fishermen usually catch fish at night. Around 6

p.m., they went out to sea and waited for the fish.

Then come home at dawn. So, morning and afternoon

is the time for fishermen to rest. According to

(Munthe et al., 2018), there are also certain days of

fishing—only some days to catch fish. During the

"dark moon", fishermen only go to sea to fish. If it is

a "bright moon", fishermen will not go to sea. It also

depends on the weather. If the weather is not good,

the fishermen will also be unable to go to sea.

Fishermen can catch a variety of catches. The

catches of fishermen in Bintan are as follows: various

fish such as pomfret, mackerel, boren, red, worm trap,

goli jebung kaci, coral, grouper, selar selikur, cob,

and tamban. In addition, the catch is in the form of

shrimp, crabs and barks. Some fishermen catch only

one type of fish. Some fishermen catch more than one

species. Fishermen who catch more than one species

have a higher income than other fishermen. To carry

out their work, some fishermen have subordinates.

The catch and the money increase in proportion to the

number of subordinates who assist. According to

(Norlinda, 2022), those who have researched the

influence of labour on the revenue of fishermen in the

Munthe, I., Fatahurrazak, ., Sari, R., Tambunan, R. and Adel, J.

Factors that Affect Fishermen’s Income with Fuel Cost as Moderating Variable.

DOI: 10.5220/0012649600003798

Paper published under CC license (CC BY-NC-ND 4.0)

In Proceedings of the 2nd Maritime, Economics and Business International Conference (MEBIC 2023) - Sustainable Recovery: Green Economy Based Action, pages 25-31

ISBN: 978-989-758-704-7

hamlets of Ambahai, more labour and cooperation

with each other, the greater the catch, so the income

will also increase. Generally, fishermen sell their

catch to Toke. Then, Toke will sell again to the

merchant. Ship crew can be paid regularly per month

or day. It is also possible for subordinates to get profit

sharing from the sale of fish.

Experience in the sea will determine a fisherman's

skill in getting fish catches. Fishermen with more

experience can find it easier to determine where to

catch and the most effective way to get more catches.

According to (K. Cahyandi, 2021), having prior

experience at sea has a major impact on whether or

not one chooses to travel to sea again. Small-scale

fishing activities rely only on work experience at sea

and do not depend on guidelines or technology to

determine fishing locations. The length of time

fishermen go to work varies. In a month, fishermen

can work 20 days or even every day. Fishermen are at

sea for 4 to 5 hours. They usually go at night. Coming

home from the sea is tomorrow afternoon. Some

fishermen can spend 4 or 5 days at sea. Fishermen's

fishing gear can be in the form of traps, handlines,

nets, and trawls. If the fishing gear is damaged, new

fishing gear must be purchased. Fishing lines should

always be replaced when going out to sea.

Consumption will play an important role,

especially for fishermen who go to sea. For fishermen

to go to sea, they consume food, drinks, and even

cigarettes. Fishermen go to sea after 6 p.m. until the

next morning. From the results of (A. Widodo, 2019),

each additional ransom (food) at sea will affect

fishermen's catch in Medan Belawan District.

Fuel oil is a supporting factor in going to sea.

Fishermen-used boats must be filled with fuel. The

amount of fuel oil used depends on the size of the

ship, which ranges from 15 to 1,000 litres per month.

Based on the research results by (Lasut et., al, 2016),

fuel significantly affects fishermen's income in the

Tuminting sub-district of Manado.

Fishermen's catches have a significant impact on

increasing their income and overall well-being.

Various factors influence fishermen's income,

encompassing both social and economic aspects.

These factors include consumption costs, the

number of boats, the number of workers, the distance

travelled, and experience (Sujarno, 2008). In

alignment with this, the current research aims to

observe and assess the factors affecting income of

fishermen from a socioeconomic perspective,

specifically focusing on consumption costs, work

experience, labour costs, and fuel expenses and how

these factors influence fishermen's income in Bintan

Regency.

2 LITERATURE REVIEW

2.1 Production Theory

As outlined by Joesron and Fathorrozi (2003),

production refers to the outcome of an economic

process or activity that utilizes various inputs with the

aim of enhancing the utility, or usage value, of a

product. The utility of a product increases when it

provides new or added benefits compared to its

original form.

More precisely, production is an enterprise's

activity that involves combining diverse inputs to

generate output at the lowest possible cost. Hence, the

production function is an equation that illustrates the

maximum output achievable through a specific

combination of inputs.

Each input has a distinct function and is

interconnected with others, meaning that if one factor

is unavailable, it can disrupt the production process.

Increased production will increase fishermen's

income. Income fishermen is income earned by

fishermen who have been reduced with costs

(Sukirno, 2006). The factors that influence

fishermen's income levels are as follows:

1. Work experience

Work experience is defined as an activity or the

process that someone has experienced when

earning a living to meet his life needs (Rofi,

2012).

2. Labour

Labour is everyone who can work to produce

goods or services for their own needs and society

(Mulyadi, 2003).

3. Consumption

Consumption is generally interpreted as using

goods and services directly fulfilling human

needs, such as cigarettes, rations, Etc. (James,

2001).

4. Fuel Oil Expenses

Fuel oil expenses are from fishermen catching

fish/sea products (Sukirno, 2006).

3 RESEARCH METHOD

3.1 Sampling and Data Collection

Within the framework of sampling and data

collection, the statistical population of the present

study initially encompassed a total of 132 fishermen.

Thus, the final sample became 52 fishermen.

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3.2 Data Analysis

The current research uses content analysis techniques

to explore the factors influencing fishermen's income

levels. Data were collected using the questionnaire

method, which fishermen have filled out.

The present study utilizes descriptive statistics for

data analysis, wherein the acquired data is described

without the aim of drawing overarching conclusions

or generalizations. The results of the data tabulated in

Excel are then processed in SPSS. The analysis model

used is the Moderated Regression Analysis model

(Ghozali et al., 2018).

4 RESULTS AND DISCUSS

4.1 Classic Assumption Test

Before conducting the regression analysis, this study

first tested the classical assumptions. The testing of

classical assumptions using the SPSS program in this

research encompassed the following:

4.1.1 Normality Test

The purpose of the normality test in this investigation

was to determine whether or not the regression model

adheres to the normal distribution. The Kolmogorov-

Smirnov test was employed for this purpose.

According to the normality test results, the

Kolmogorov-Smirnov significance value was

discovered to be 0.200, which is higher than the 0.05

threshold required for statistical significance.

Because of this, data of this study is normally

distributed, indicating that the normality assumption

is met.

4.1.2 Multicollinearity

The intent of the multicollinearity test undertaken in

this study was to investigate the possibility of

correlation among the independent variables within

the regression model. Multicollinearity has not an

impact on the desirability of a regression model. The

existence of multicollinearity in the dataset was

evaluated by employing the Variance Inflation Factor

(VIF) and Tolerance values. The outcomes from the

multicollinearity test revealed that the Variance

Inflation Factor (VIF) value was below 10, reflecting

a low level of multicollinearity. Furthermore, the

tolerance value exceeded 0.1, further supporting the

absence of significant multicollinearity. As a result,

the data used in this study is free from

multicollinearity, indicating that the independent

variables do not exhibit high correlations.

4.1.3 Autocorrelation

Examining for autocorrelation conducted in this

research aimed to examine whether a regression

model exhibits correlations between the error terms in

period 't' and the error terms in the previous period, 't-

1.' The Durbin-Watson test was employed for this

autocorrelation analysis. Based on the results of the

autocorrelation test, it was determined that the

Durbin-Watson statistic falls within the range of 'dU

< DW < 4 - dU,' which suggests that the proposed

regression equation model does not suffer from

autocorrelation.

4.1.4 Heteroscedasticity

The objective of the heteroscedasticity test performed

in this study had been to detect the presence of

unequal variance among residual data within the

regression model. If the variance of residuals remains

consistent across observations, it indicates

homoscedasticity, whereas differing variances

suggest Heteroscedasticity.

A desirable regression model does not exhibit

Heteroscedasticity. Based on the outcomes of the

heteroscedasticity test, it was noted that the p-value

for each independent variable, specifically work

experience, consumption, labour, and fuel oil costs,

exceeded 0.05. Consequently, the regression model in

this study does not suffer from Heteroscedasticity,

indicating that the variances of residuals across

observations are relatively consistent.

4.2 Descriptive Statistics

Table 1: Descriptive Statistics.

Source: processed SPSS results, 2023.

Table 1 shows the summary descriptive statistics of

the variables. The analysis shows that the average

labour cost is 55.59, meaning that the costs

influencing fishermen's income are generally labour

costs. The standard deviation of labour costs is 87.47

above the average (55.59), meaning that labour costs

have high data variations. The range of work

Factors that Affect Fishermen’s Income with Fuel Cost as Moderating Variable

experience comprises a minimum value of 2 to a

maximum value of 42, with a mean value of 18.37.

This average exceeds the standard deviation of 7.48,

indicating a significant degree of variability in the

data pertaining to work experience. Consumption

costs have the uppermost limit of 144 and a lower

bound of 5.59 with an average value of 11.89, which

is lower than the standard deviation (19.45), meaning

that consumption costs have low data variation. Fuel

oil costs have a maximum value of 48 and a minimum

value of 6.27 with an average value of 16.79, which

is higher than the standard deviation (14.85), meaning

that fuel oil costs have high data variations. The

income level of fishermen has a maximum of 576 and

a lower of 62.72 with a middle value of 151.31, which

is lower than the standard deviation (72.06), meaning

that the income level of fishermen has low data

variation.

4.3 Regression Analysis

The statistical model used to test the hypothesis is

Moderated Regression Analysis (MRA). Moderated

Regression Analysis (MRA) in this study is intended

to see how work experience, consumption, labour,

and fuel costs affect fishermen's income. In order to

assess the viability of the regression model, various

factors can be taken into consideration, as outlined

below:

4.3.1 F Test

The F test shows whether all the independent

variables included in the model can be explanatory or

predictor variables.

Table 2: ANOVA Test Results (Simultaneous Test).

Model

Sum of

Squares

Mean

Square

Sig.

Informatio

Regression

264860,343

66215,08

608,083

0,000

Significant

Residual

5226.796

108,892

Total

270087.139

Source: processed SPSS results, 2023.

Table 2 shows that the calculated F value of

608.083 has a probability (sig) of 0.000, which is less

than 0.05. Work experience, consumption, labour,

and fuel costs can become explanatory variables.

Hence, the conclusion is that the regression model is

feasible to predict fishermen's income. Thus, the

regression model is a good fit for research.

4.3.2 Coefficient of Determination

The percentage of independent variables explaining

fishermen’s income in the research model is shown

by the magnitude of the coefficient of determination.

Table 3: Results of Analysis of the Coefficient of

Determination.

R Square

Adjusted R Square

0,990

0,981

0,979

Source: processed SPSS results, 2023.

Based on Table 4, it is known that the adjusted R2

is 0.990. This value indicates that the variation in

fisherman’s income can be explained by 99% by

variations in the independent variables, and the

remaining 1.00% is explained by the causes of

variables outside the model so that this model is

considered capable of explaining the dependent

variable.

4.3.3 T Test

Table 4: Results of Partial Analysis.

Variable

Unstandardized

Coefficients

Standardi

zed

Coefficien

Sig.

Information

Std.

Error

Beta

(Constant)

116.01

11.694

9.921

0, 000

Work

experience

0.704

0.255

0. 073

2.755

0,008

Significant

Consumption

-5.977

1.118

-1.613

-5.347

0,000

Significant

Labour

0.494

0.197

0.599

2.508

0,016

Significant

Fuel cost

1.898

0.494

0.392

3.842

0,000

Significant

Work

Experience*

Fuel cost

-0.014

0.008

-0.068

-1.622

0,112

Significant

Consumption*

Fuel cost

0.211

0.025

2.525

8.267

0,000

Significant

Labor * Fuel

cost

-0.027

0.011

-0.664

--2.475

0,017

Significant

Source: processed SPSS results, 2023.

Based on table 3 it can be explained as follows:

1. The Effect of Work Experience on Fishermen's

Income

According to the results obtained from SPSS

calculations, a t-value of 2.755 was computed, and its

associated significance value was determined to be

0.008, which is less than the threshold of 0.05. This

result indicates that work experience has a

statistically significant effect on fishermen's income.

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2. The Effect of Consumption on Fishermen's

Income

Based on the results obtained from calculations using

SPSS (as shown in Table 3), a t-value of -5.347 was

observed, and the associated significance value was

determined to be 0.000, which is less than the

significance threshold of 0.05. This result suggests

that consumption has a statistically significant impact

on fishermen's income.

3. The Influence of Labour on Fishermen's

Income

Based on the results of calculations using SPSS (as

presented in Table 3), a t-value of 2.508 was obtained,

and the associated significance value was found to be

0.0016, which is less than the significance threshold

of 0.05. This result implies that labour has a

statistically significant impact on fishermen's income.

4. The Effect of The Fuel Cost on Fishermen's

Income

Based on the calculations using SPSS, specifically

from Table 3, a t-value of 3.842 was determined, with

an associated significance value of 0.000, which is

less than the significance threshold of 0.05. This

result indicates that fuel costs have a statistically

significant impact on fishermen's income.

5. The Interaction Effect of Working Experience

with The Fuel Cost on Fishermen's Income

Based on the information presented in Table 3, it is

evident that the interaction between work experience

and fuel costs (Work Experience * Fuel Costs) on

fishermen's income yields a t-value of -1.622, and the

corresponding probability (sig) is 0.112. This

probability value (sig) is greater than the significance

level of 0.05 (0.112 > 0.05), indicating that the

interaction between work experience and fuel costs

does not have a statistically significant effect on

fishermen's income.

6. The Interaction Effect of Work Experience

with the Fuel Cost on Fishermen's Income

Based on the data provided in Table 3, it is evident

that the interaction between consumption and fuel

costs (Consumption * Fuel Cost) concerning

fishermen's income yields a t-value of 8.267, and the

corresponding probability (sig) is 0.000. This

probability value (sig) is less than the significance

level of 0.05 (0.000 < 0.05), signifying that the

interaction between consumption and fuel costs has a

statistically significant effect on fishermen's income.

7. The Effect of The Interaction of Labour with

the Fuel Cost on Fishermen's Income

Based on the information provided in Table 3, it is

evident that the interaction between labour and fuel

costs (Labor * Fuel Costs) concerning fishermen's

income yields a t-value of -2.475, and the

corresponding probability (sig) is 0.017. This

probability value (sig) is smaller than the significance

level of 0.05 (0.017 < 0.05), indicating that the

interaction of labour and fuel costs has a statistically

significant effect on fishermen's income.

5 CONCLUSION

1. Work Experience Affects Fishermen's

Income in Bintan

Experience is the best teacher. According to the study

results, the experience of working fishermen ranged

from 2 years to 55 years. The age range of fishermen

ranges from 18 to 70 years. There are even fishermen

who have gone to sea since they were small, i.e.,

around the age of 10. The right pattern has been

formed for capturing the catch. This study is by

research (Norlinda, 2022). With the experience they

have, it can help fishermen know the right point to

place fishing gear, such as fishing nets, to produce

many catches. Also, experience is very important

because, with experience, we can find out which

locations have many results and which do not.

2. Consumption Costs Affect Fishermen's

Income in Bintan

Fishermen usually spend a long time at sea. They

need food, drink, and even cigarettes. Consuming

much delicious food will make fishermen enthusiastic

about looking for catches. As a result, the higher the

consumption costs, the more powerful the fishermen

should be at catching more fish. This will increase the

income of fishermen. However, the consumption that

is brought about could be better now. Fishermen may

bring homemade dishes such as rice and side dishes

cooked at home. So it does not taste good anymore.

This study is by (Dahen et al., 2016), although it

differs in its effect. The study's results (Dahen et al.,

2016) show that working capital's homemade dishes

(consumption costs) can increase fishermen's income.

Meanwhile, the results of this study show that

consumption costs harm income.

Factors that Affect Fishermen’s Income with Fuel Cost as Moderating Variable

3. Labor Cost Affects Fishermen's Income in

Bintan

The number of workers can make fishermen catch

many fish. Reasonable and tempting wages will

encourage workers to work harder. This study is by

research (Norlinda, 2022). When they work together,

they will both benefit, and the probability of getting a

catch will increase, which in turn will generate

income as well. In addition, some fishermen still have

to lift their nets themselves or with manual labour. If

more people help, the work will be faster, and the

catch will be greater. This study is by (Sakti et al.,

nd). Labour is needed in catching fish, and for lifting

nets, manual labour is needed directly from the labour

itself to maximize the catch from businesses in

Semidang Alas Maras District, Seluma Regency.

4. Fuel Costs Affect Fishermen's Income in

Bintan

Ships need fuel. If the distance to the sea is close, then

the catch is also a little. The farther the fishermen go

to sea, the deeper the sea, so the catch is also higher.

For this reason, fishermen need much fuel so they can

go further out to sea. This result is by research

(Sofiana et al., 2017). The wider the fish catch, the

variety of fish caught and the size of the catch. The

fishermen can expand their catch because fishermen

can provide more fuel, and the ship's condition is well

maintained. With a longer time at sea, fishermen can

catch more fish.

5. Fuel Costs Cannot Moderate the Effect of

Work Experience on Fishermen's Income in

Bintan

The longer working experience will not affect

fishermen's income, even if supported by adequate

fuel. More experienced fishermen can estimate the

exact time needed to go to sea. So fishermen can save

fuel and will be bolder to go to sea. According to

research (Ibrahim, et al., 2021), the more a fisherman

understands the sea conditions and fish

characteristics, the easier it is for him to catch fish.

The longer the experience, the more sensitive

fishermen are to the fish's position, making it easier

for fishermen to catch fish in the sea so that the time

they use becomes faster and saves fuel.

6. Fuel Cost Can Moderate the Effect of

Consumption Cost on Fishermen's Income in

Bintan

Much fuel will be able to increase consumption costs

and increase fishermen's income. Fishermen may

spend days at sea. Besides that, it is a long journey.

For that, it takes much fuel and much consumption as

well. This study is by research (Sofiana et al., 2017).

Fuel and consumption are fishermen's working

capital. The amount of working capital used will

increase the fishermen's income opportunities.

Because of working capital, the fishermen's catch

area will be expanded, and the time at sea will be

longer.

7. Fuel Costs Can Moderate the Effect of

Labour Costs on Fishermen's Income

Much fuel will reduce labour costs and increase

fishermen's income. Fishermen use diesel and petalite

for their boats. Some fishermen buy fuel oil at official

Pertamina dealers. Some buy at wild stalls. When

buying at an official kiosk, the price of diesel fuel is

Rp. 6.800 per litre. However, if Fishermen buy it at

an illegal kiosk, then the price of diesel is Rp. 10.000

per litre. The amount of fuel oil used depends on the

size of the ship, which ranges from 15 to 1,000 litres

per month. Fuel is an important factor in fishermen's

activity. Fishermen very much need the availability

of fuel by authorized dealers. When buying at illegal

kiosks, the fuel price can be higher than it should be.

The government, in this case, Pertamina, should

provide more authorized dealers. Also, fishermen can

avoid linger at sea if the fuel price is high. Expensive

fuel will reduce labour costs. This study is by research

(Lasut et al., 2016) that shows rising fuel prices have

a major impact on fishermen's income. The

government's active role as power holders and

policymakers must pay greater attention to this

problem. As the institution responsible for the

division and distribution of fuel oil, the government

must pay greater attention to the availability of fuel

oil supplies and the ease of access to obtain them.

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Factors that Affect Fishermen’s Income with Fuel Cost as Moderating Variable