Factors Influence Sugarcane Field Expansion in Indonesia
IJMIE Volume 5, Issue 4, April 2015
11 Pages Posted: 31 Mar 2020
Date Written: April 22, 2015
Sugarcane field in Indonesia has been developing over 20 years, but the rising field is not numerous improvement. That’s the reason that sugar production is low in growth. There should have been factors influenced by the sugarcane field expansion in Indonesia. That’s the reason there is a need to conduct research on what factors influence sugarcane field expansion in Indonesia.
The result of research said the price of sugar is the factor influences sugarcane field in Indonesia. The higher price of sugar the more opportunity for sugarcane field to expand with coefficient regression of 18.67. Farmers grow sugarcane have liberated decision which doesn’t depend on the prices of paddy and maize, either on the lending of the interest rate. After the factor has been found, the research is continued with the scenario of how if the farmer’s floor price is increased 30 % in order to raise the price of sugar. The result gave effect on raising of sugar price of 14.4 %, and both sugarcane and sugar production will rise by 4.7 %. It measures that increasing floor price can be made use of government policy instrument to build up sugar price which links to sugarcane field expansion as well as sugarcane and sugar production improvement.
Keywords: Sugarcane field expansion, sugarcane production, sugar production, sugar, sugarcane
JEL Classification: Q24
Suggested Citation: Suggested Citation