The Journal of Asian Finance, Economics and Business

Korea Distribution Science Association (한국유통과학회)
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The Business Alteration for Tobacco Farmers: Lessons from Rural Area in Indonesia

  • SEDYATI, Retna Ngesti (Universitas Negeri Malang and FKIP Universitas Jember) ;
  • DJATMIKA, Ery Tri (Department of Development Economics, Faculty of Economics, Universitas Negeri Malang) ;
  • WAHYONO, Hari (Department of Development Economics, Faculty of Economics, Universitas Negeri Malang) ;
  • UTOMO, Sugeng Hadi (Department of Development Economics, Faculty of Economics, Universitas Negeri Malang)
  • Received : 2019.07.06
  • Accepted : 2019.09.24
  • Published : 2019.11.30
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Abstract

The study aims to analyze the adaptation strategies and resilience of tobacco farmers to face unfavorable trading system. The research method refers to a qualitative approach with phenomenological models and case studies. The findings revealed tobacco farmers in Jember developed various adaptation strategies and resilience through farmer group organizations, partnerships, self-capacity building and access to financial institutions based on economic, social, cultural, and experience values from various sources and interactions among fellow tobacco farmers. The tobacco trading system, which is left to the market mechanism, results in low bargaining power of farmers, this encourages tobacco farmers to develop various adaptation and survival strategies, namely through collective activities of farmer groups, partnerships and self-development and access to financial institutions. Dealing with the unfavorable tobacco trading system, tobacco farmers do not switch to other commodity farming but adapt and make Jember a center for tobacco production in East Java and Indonesia. From this findings, it suggests to the government as the regulator does not only provide subsidies for tobacco farmers, but also must provide various technical assistance to increase the ability of tobacco farmers. More importantly, regulations must be made benefit tobacco farmers other than corporations so that equality can be enjoyed by tobacco economy players.

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