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| Figure 1: Construction of path diagram using Measurement Model |
| Livestock Research for Rural Development 26 (2) 2014 | Guide for preparation of papers | LRRD Newsletter | Citation of this paper |
Nucleus-Plasma contract farming has been dominated broiler farming system in Indonesia and successfully generated rapid progression of broiler population. Unfortunately, this success attainment could not spread broiler farmers’ welfare evenly. Imbalance position between company and farmers in the contract farming scheme caused poor empowerment level of the farmers. The research was based on a survey of 114 respondents chosen by using probability random sampling. Data were gathered by structured interview using a questionnaire, then processed using Structural Equation Modeling.
Broiler farmers’ empowerment level was influenced by Participatory Development Communication (PDC) Practice and Farm Input Accessibility. However, PDC practice did not affect Farm Input Accessibility. It is recommended to increase broiler farmers’ empowerment level by increasing farmers’ involvement in participatory development communication practice and by enhancing broiler farming input accessibility.
Keywords: communicaton, contract farming, day-old chicks, feed companies, information
The broiler industry in Indonesia has shown significant growth since the first broiler strain was introduced in the 1980s. Based on Animal Husbandry General Directorate (Direktorat Jenderal Peternakan) data, in 2008 the total broiler population in Indonesia was 902 million. This number increased rapidly in the last 10 years with average 7% growith per year (Anonymous 2011). The contract farming scheme as a cooperation system between broiler farmers and industry has contributed to this success story. Contract farming is an intermediate production and marketing system that spreads the production and marketing risks between agribusiness and smallholders (ACIAR 2008). Unfortunately, although this farming system has effectively fulfilled white meat demand, it could not ensure farmers’ prosperity. Much research has shown that most advantage goes to the company and big broiler farmers while small scale farmers are left behind. This fact triggered much criticism of the contract farming system and its application. Glover and Kusterer (1990) stated that the Nucleus company had a right to refuse products that did not meet its standards. Eaton and Shepherd (2001) also mentioned that contract farming was more beneficial for the company because it enabled a supply of cheap workers (the farmers) and transferred the farming risk to them. It was very difficult to maintain a relationship where profit was evenly distributed between sponsor and farmers.
Empowerment is the most likely answer to this imbalanced situation. It helps people to understand their position and to make decision for themselves. Melkote and Steeves (2006) divided empowerment as a process where individuals, organizations and community have control over social and economic conditions, with democratic participation of the community and control of their lives. Hur (2006) gave four empowerment main concepts based on several opinions: (1) meaning concept, (2) competence, (3) self-determination and (4) impact. In the meaning concept, knowledge and critical consciousness were considered as two important factors. Rogers (1994) defined two aspects of farmers’ knowledge: (1) “how to” knowledge, with information needed to use the innovation; and (2) “principal” knowledge, consisting of information about the function of the innovation. Melkote and Steeves (2001) defined critical consciousness as a condition in which an individual was able to identify his/her position, to analyze his/her problem and its causes, to have a rank of his/her problem priority and to get a new knowledge from it. At last, he/she can decide what to obtain to fulfil his/her needs. Competence concept was explained as farmers’ skill in recording expenses, applying new managerial ideas and farming innovation, and operating farming equipment (Lionberger and Gwin 1982). Competence allows farmers to perform at a higher production level. Ellis (2006) related self-determination concept to farmer’s ability in controlling his/her farm. It includes farmer’s behavior to avoid uncertainty that will risk his farming sustainability. Lastly, impact concept relates to how an individual can affect his/her surroundings. Ife and Tesoriero (2006) stated that an individual can give impact to his society if he/she is able to express ideas, to have an effective dialog with the other party and to contribute ideas to public knoelwledge.
One variable that influences farmers’ empowerment level is the farmers’ involvement in the development program by using their communication activities. Hawkins and Van den Ban (1999) stated that information is a crucial resource in modern agriculture. Computer and telecommunication technology give a good chance to farmers to be better managers and to make better decisions. These resources also can inspire farmers to express their opinion to authorized institution. By actively participating in the communication process, farmers are able to convey their objectives and to be involved in the development program. This process allows harmonious effort between development program implementation and farmers’ needs and wants. This type of communication is called Participative Development Communication (PDC). Bessete (1996) defined Participatory Development Communication program as a process to facilitate interaction that targeted categories between specific users and specific development problems so as produce social change. Thus, participatory development communication encourages activities which assist farmer groups and communities to identify and to implement solutionss for their own development problems. In the contract farming pattern, by applying PDC effectively farmers can communicate their needs, wants and aspirations to other stakeholders. Being heard and taken into account by other stakeholders, farmers will enjoy a stronger bargaining power toward their partners.
The other variable which affects farmers’ empowerment level is farm input accessibility. Lionberger and Gwin (1982) emphasized that accessibility as an important variable in farmers’ goal achieving efforts. Farmers need assistance to enter the market, for storage facilities, transportation, information and service, seed, feed and fertilizer supplies, loan and government policy, regulation and program support. These vary in every country, and in every community within a country. It also stated that in the long term large scale farmers have better access to good and persistent information, farm supplies, credit and services, but small scale farmers are in the contrary situation. Small scale farmers are even excluded from markets if the institutions which process farm products prefer to contract large scale producers.
Malang Regency is an important broiler meat supplier area in East Java. In 2011, Malang Regency produced 11,000 tonnes of broiler meat (Anon 2011). In 2012 the average size of a broiler farming operation in this area was 7,300 birds. This indicates that most broiler farmers in Malang Regency have a small scale operataion which needs to be promoted in the future.
Based on the rationale above, the objectives of the present study were to identify relationships between: (1) participatory development communication and farm input accessibility, (2) farm input accessibility and broiler farmers’ empowerment level, and (3) participatory development communication and broiler farmers’ empowerment level.
The research was conducted in Malang Regency, East Java. The research population was broiler farmers in Malang Regency who particated in contract farming and used the same commercial feed widely available in East Java. There were 159 farmers located in 15 sub districts: (1) 39 farmers in the western area that consists of 4 sub districts: Wagir, Ngajum, Wonosari and Dau; (2) 104 farmers in eastern area that consists of 6 sub districts: Wajak, Tumpang, Pakis, Gondanglegi, Poncokusumo and Jabung; (3) 6 located in northern area: Singosari; and (4) 10 farmers in southern area that consists of 4 sub districts: Bululawang, Kepanjen, Pakisaji and Gedangan.
A survey method was used to collect data about broiler farmers’ PDC practice, farm input accessibility and empowerment level. Probability sampling with simple random sampling was used to determine research sample size. The samples collected were: Wagir 12 farmers, Ngajum 12 farmers, Wonosari 3 farmers, Dau 1 farmer, Wajak 14 farmers, Tumpang 27 farmers, Pakis 9 farmers, Gondanglegi 9 farmers, Poncokusumo 4 farmers, Jabung 3 farmers, Singosari 4 farmers, Bululawang 4 farmers, Kepanjen 1 farmer, Pakisaji 1 farmer and Gedangan 1 farmer.
The technique employed for data collection was structured/guided interview by using a questionnaire. The data collected were then analyzed by using Structural Equation Modeling.
The relationships between PDC practice, farm input accessibility and farmers’ empowerment level are illustrated in a path diagram by using the Measurement Model (Figure 1P). Indicators of: (1) PDC practice variables were: effective communication channel, information exchange intensity and two-ways media usage; of (2) Farm Input Accessibility variables were: input accessibility, related institution service, transportation facilities, information accessibility, market accessibility and storage facility; and (3) Farmers’ Empowerment Level variables were: farmers’ knowledge, awareness, competence, risk taking, initiative and proactive behavior and bargaining power.
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| Figure 1: Construction of path diagram using Measurement Model |
Participatory Development Communication (PDC) practice did not give significant impact toward Farm Input Accessibility (Figure 1). The value of t was 0.043 < t value from the table of 1.66 (with error level of 5%). The parameter coefficient of the farmers for PDC practice was 0.004 (0.4%), that is the impact of PDC practice to farm input accessibility was 0.4%. PDC practice did not give substantial benefit to farmers’ access to feed, DOC (Day Old Chicken), equipment and drugs. The stable availability of farm inputs in Malang Regency and guaranteed input loans from the contract farming scheme made it possible for every farmer to get easily their farming needs. PDC practice also did not give a significant impact to water and electricity institution services. These institutions had no special facilities for broiler farmers to obtain water and electricity connections. These services are vital for the broiler farming process. The farmers noted that it was difficult to get reliable supplies of water and electricity. Other farm inputs such as transportation, information, market and storage facilities were also hard to change by only using the communication process. Thus there aremany factors involved in the system. Our research suggests a need for Government willingness and farmers’ effort to make these facilities work appropriately.
Participatory Development Communication (PDC) practice had a positive effect on the broiler farmers’ empowerment level. The value of t was calculated to be 3.7 thus greater than the table value of 1.66 for error level of 5%. As this finding rejected the null hypothesis, it meant the Participatory Development Communication (PDC) practice significantly affected broiler farmers’ empowerment level. The Parameter coefficient of Participatory Development Communication (PDC) practice toward the broiler farmers’ empowerment level was 0.228 (22.8%), thus Participatory Development Communication (PDC) practice’s impact toward broiler farmers’ empowerment level was 22.8%. There were three indicators of PDC practice: Effective communication channel selection, two way media usage and information exchange intensity. Better practice of these three indicators made farmers achieve their objectives moore easily. In broiler farming, effective communication channel selection was indicated by the farmers’ ability to communicate with a ‘right’ person. Farmers who knew a person to talk to in the company management line could get a better negotiation result. For example, farmers were able to negotiate the date of harvesting that was most profitable for them. In the same way, farmers who were able to utilize two-way media (telephone and mobile phone) to communicate with stakeholders also got more advantage. If they got the latest information about broiler prices and farming issues then they would be more knowledgeable and less dependent on their partner in making decisions. The other factor was Information exchange intensity between farmers and other parties. This aspect was an important key to enhance farmers’ empowerment level. Intensive exchange information between farmers and other stakeholders gave more market and input information to farmers. It also equipped farmers with better knowledge about on-farm and off-farm information. Farmers were able to analyze information in order to survive and to expand their business independently. This would lead to a better bargaining power. All of these factors were important points in partnership because if one side is too dependent to the other party then the partnership would not be to fair. Mahyudi et al (2010) found that in broiler farming activities, a good communication process involving all parties in the broiler farming system would increase farmers’ human resources and their empowerment level.
An effective participatory development communication practice in general helped farmers to take a stronger part in the broiler development program. Farmers’ aspirations can encourage government and other institutions to reconsider broiler partnership regulations. Guidance and support from stakeholders in participative information technology allowed farmers to acquire information they needed and to find the most suitable technology (other than the technology suggested by the company). This important aspect of participative communication in empowering the farmers was highlighted by Mefalopulos (2008). He believed that participation is nonsense without good communication. In order to make the communication significant and meaningful, the participation should be based on the principles or the practice of two-way communication. Therefore, the communication should be more concerned in facilitating the stakeholders’ involvement during the problem analysis and the resolution.
Farm Input Accessibility was found to have a significant impact on broiler farmers’ empowerment level, with the value of t (by calculation) = 2.89 > value of t from the table = 1.66 at the error level of 5%. Parameter coefficient of Farm Input Accessibility for business inputs for farmers’ empowerment level was 0.172 (17.2%). It meant that there was a significant impact of Farm Input Accessibility toward farmers’ empowerment level. In the contract farming scheme, most inputs were dominated only by certain companies. If farmers were able to get farm inputs from more companies, farmers would have more options on which to base the partnership. Government should form a system that can protect farmers from this kind of domination in inout availability. On the credit aspect, the contract company only gave loans for day-old chicks, feed and medicine/vaccine supply. Many farmers noted that credit access was not widely open for them, although they often needed ready cash in the cases of natural disaster and disease outbreak. When farmers failed to get support in these situations then they were not able to continue their farming activities in the next period. Therefore, access to institutions which offer cash loans will be beneficial for farmers. This result is supported by Yunus (2009) who stated that farmers’ low empowerment level was caused by their weakness in credit, technology and managerial skills. Transportation accessibility gave biggest effect to farm input accessibility, followed by other indicators such as credit access, information access, services from related institutions, market access, storage, and farming input in sequence. Transportation facility made it easier for farmers to communicate with other stakeholders and to acquire farm inputs, for instance, day-old chicks, feed, medicine and farming equipment.
Information access and storage facility were part of the technology which empowers farmers. Broiler farmers required good information technology to collect market price information before signing a contract. This information was needed by farmers to penetrate a wider market and to have an alternative besides doing a partnership. Farmers who were informed would have a better bargaining power. Storage technology aimed to add value to broiler meat and to raise its price. By acquiring this technology, broiler farmers could have two options: to do a partnership or to act as entrepreneurs that produce and process their own products. The utilization of a storage facility allowed broiler farmers to keep and to process their product customized to market demand. Broiler farmers could decide which kind of farming style they considered could give higher income. The significant correlation between storage facility and decision ability was confirmed by Gilbert and Jones research in Malawi that storage facility affected maize farmers’ decision to choose a better seed variety which resulted in higher income (Gilbert and Jones 2012).
Inputs that were most important for farmers were day-old chicks (DOC) and feed. DOC shortage and increased feed costs were recurring urgent problems for broiler farmers. DOC shortage and increased price were usually due to disease outbreaks. Feed scarcity because of rising feed component price sometimes happened although it was not very common. This condition would lower farmers’ empowerment level because farmers did not have any choice other than continue buying feed from the company to sustain their business. In this case, the company has to assist farmers to keep their production cost in the lowest level so farmers still get reasonable profit even when the price is low. It was much appreciated that sometimes DOC (breeding) industries stabilized DOC price by decreasing the number of hatching eggs to help farmers at the same time to reduce their profit loss when DOC population was too high. Giving reasonable incentive and harvesting price are two other ways to help farmers face descending market prices. Likewise, government also has to assist farmers to maintain their business by issuing some rules which can guarantee normal DOC supply. Government may play a salient role in this situation. Firstly, government can guard DOC population quota regularly in every area to prevent DOC surplus or shortage. If the number of the DOC is adjusted to market demand and price, then the risk price fluctuation can be minimized. Secondly, government can stabilize market price by establishing cold storage to buy excess products and to keep the products when the price is low.
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Received 7 September 2013; Accepted 29 January 2014; Published 4 February 2014