Factors affecting the FFB price of independent smallholder oil palm farmers in Jambi Province

Abstract

Smallholder plantations play an important role in oil palm development in Jambi Province with a contribution of 70.47 percent to the total area and 57.10 to total palm oil production. Most of the smallholder plantations are self-managed by independent smallholders whodo not get technical guidance from either government or private sector. Various problems are found in independent smallholders, one of which is the discrimination of the price of fresh fruit bunches (FFB) their produced. Price discrimination does not only occur between independent smallholders and plasma farmers, but also occurs between independent smallholders. This study seeks to express empirically the price differences and analyze the factors that influence it. Data were collected from 240 respondents spread across 12 villages in 3 districts of palm oil production centers and analyzed with a multiple linear regression model. The results of the study concluded that there is a significant difference between prices received by independent smallholders and prices received by plasma farmers and among independent smallholders. The price difference is significantly influenced by the quality factor of the seeds used, the amount of fertilizer use, the experience of farmers in farming and the marketing channels used.