Role of Institutional Factor to Increasing Revenue of Recipients Rural Agribusiness Development Program (PUAP) in Swamp Land South Sumatra

Abstract

The broad objective of community empowerment programs is to eradicate poverty. In general, the image of the poor lives in rural areas and mostly farmers. Similarly, the farmers in South Sumatra province which mostly managed wetlands as their livelihood are poor, especially in the districts of Ogan Ilir (OI) and Ogan Komering Ilir (OKI). In fact, the targets of programs which have been done by the government in order to improve the economic development of rural communities mostly were not achieved; therefore, the programs were not unsustainable. The solution proposed to solve the above problem is to improve institutional capacity building of farmers and farmer groups aimed at improving the competitiveness of farmers in developing agribusiness system. In 2008, The Government of Indonesia through the Ministry of Agriculture launched the Rural Agribusiness Development Program (PUAP). PUAP is a community empowerment which is realized in the form of venture capital strengthening assistance for farmer group's members. Operationally, distribution of PUAP fund is done by giving authority to the farmer group association that was selected to the implement the PUAP program. The purpose of this study is to analyze the role of farmer group institution in increasing the income percentage of wetland-based farmers who used the PUAP funds in South Sumatera. This study used survey method and purposive sampling method. Samples of 200 farmers who received PUAP funds were taken systematically and randomly. Data collected were analyzed by using the SPSS Multiple Linear Regression Analysis. The results showed that the institution influenced in increasing the percentage of revenue due to PUAP/Main Revenue (IPRP/MR). The income of 45% of PUAP fund recipients increased by 100%-200%; as much as 41.5% increased less 100%; and as much as 13.5% increased by 200%-316%.There are three types of financial management involved, namely Farmers Group Association (49.5%), Micro-Finance Institutions (25.5%) and Farmer Group (25%).The multiple correlation values obtained at 0.783, these values indicate a close positive relationship between the independent variable to IPRP/MR. The value of the coefficient of determination (Adjusted R²) is 0.600. The adjusted R² of 0.600 indicates that the model can explain the variation of existing data by 60% due to IPRP/MR.

The result of F-test (simultaneously) showed a positive and significant influence of institutional factors on IP2R/MR Results of t-test (partially) indicated that the institutional factors Duration of Joining Farmer Groups and Finance Institution (Micro-Finance Ins.) and (Famer's Group Association) gave a positive and significant influence, while the Finance Institution (Farmer Group) and Farmer Organization gave negative and significant influence to IPRP/MR.