Efficiency of Papaya Marketing (Carica papaya L.) in Indramayu Regency, West Java Province of Indonesia

Abstract

Papaya is one of the suitable plants cultivated in Indramayu Regency. This study determines the price transmission elasticity and marketing efficiency of papaya in Indramayu Regency. It applies an econometric model using producer and consumer monthly prices of papaya in Indramayu Regency from January 2012 to December 2016. The result shows that the price transmission elasticity of papaya marketing in Indramayu Regency is 0.921. It implies that papaya marketing structure is not applied in perfect competition market. The price transmission from consumers to farmers are asymmetric, so the price change at consumer level are not transmitted to the price at farmer level. It can be concluded that the papaya marketing in Indramayu Regency is not efficient. Weak farmers bargaining position leads to lower farmers' share. Therefore, it is important to strengthen farmers' institutions, especially in agricultural products marketing chain. There is a need for cooperation between farmers, farmers group and entrepreneurs (business partnerships) so that farmers are financially independent. It will broaden the opportunity to establish the market prices.