COMPARISONS OF FARMERS’ INCOME AND CAPITAL CREATION BASE ON DIFFERENT SOURCES OF RICE FARMING FINANCING IN SOUTH SUMATRA, INDONESIA

Abstract

The objective of the research was to compare rice farmers’ income and capital creation base on a different source of rice farming financing. The study population comprised 180 farmers, 105 of which represented the own funding farmers and the rest were loan funding farmers. These were interviewed to record the rice farming behavior with a different financial source in the sixth bigger rice production in Indonesia, namely South Sumatera Province. Rice farming analysis and continued t-test was used to analyze for different production and income. Research results showed that rice productivity of own funding rice’s farmers was 29% greater than farmers on loan funding farmers. On the other hand, producing cost of own funding farmers 26% was lower than loan funding farmers. This condition causes the income of own funding rice’s farmers per hectare 56% was greater than the income of loan funding farmers. Moreover, with the family spending were not too different, capital creation of own funding farmers was greater than loan funding farmers. Almost half of the farmers have a medium level of capital creation capability, the remaining one third was more classified as high capital creation and one-eighth was classified as low. To reduce rice farming cost of loan funding farmers are savings of labor costs by supervising their labor and finding sources of loans with the lowest loan interest rates.

Keywords

• Rice farming financing
• capital creation
• own funding
• loan funding