Income and Marketing Channel Analysis of Red Chili Farming in Banjar Agung, Tulang Bawang

Abstract

Purpose: This study analyzes farm income and the marketing channels of red chili (Capsicum annum L.) in Banjar Agung Subdistrict, Tulang Bawang Regency, a smallholder production center facing declining harvested area and volatile retail prices.

Methodology: A descriptive quantitative design was applied to 15 farmer respondents and 10 intermediary-trader respondents selected through purposive and snowball sampling. Data were collected through observation, interviews, and documentation, and analyzed using production-cost analysis, income analysis, marketing-channel description, marketing-margin analysis, farmer-share analysis, and marketing-efficiency analysis.

Results: Average production cost reached IDR 975,142 per hectare (IDR 546,080 per farmer), generating an average income of IDR 6,387,940 per farmer. Two marketing channels were identified: Channel II (farmer–wholesaler–retailer–consumer) with a total margin of IDR 8,000 and a farmer share of 60 percent, and Channel III (farmer–collector–wholesaler–retailer–consumer) with a total margin of IDR 10,000 and a farmer share of 50 percent. Marketing efficiency was 20.52 percent for Channel II and 20.7 percent for Channel III.

Conclusions: Shorter marketing channels deliver a higher farmer share, while longer channels remain efficient when per-unit marketing costs are kept low.

Limitations: The study is confined to a single subdistrict, a single harvest season, and two observed channels, without controlling for weather shocks or input-price volatility.

Contributions: The study offers empirical evidence on smallholder horticultural marketing efficiency and provides a practical basis for policy and farmer decision-making regarding channel choice in emerging agribusiness regions of Indonesia.