The Role of Cooperative for Strengthening Self Reliance of Farmers in Coffee Agribusiness

(A Cases Study in Sidomulyo Village, Silo District, Jember Regency, East Java Province,
Indonesia)

Abstract

Coffee cultivation has long been known by coffee farmers in Jember District. Coffee farmers
need input production to increase their coffee quality. In short, they need support in their
production facilities, production processes and marketing for their product to run coffee
agribusiness. The farmers capability to fulfill their needs and solve their problems shows their
self reliance. In order to understand their self reliance, this study determine: (1) coffee
farmers self reliance; (2) the role of cooperatives in strengthening the self reliance of coffee
farmers. The research used descriptive qualitative method. The research area was determined
intentionally in Sidomulyo village, Silo district, Jember regency. The main informants are the
head of the farmer group as well as the chairman of the cooperative and the supporting
informants are coffee farmers. Data were collected through in-depth interviews, non-
participant observation and documentation. The results showed that all farmers’ need in the
form of inputs, production processes, postharvest and markets can be fulfilled locally by the
board in the village. This group of farmers also establish partnerships with institutions outside
their village. Their self reliance also is reinforced by the role of cooperatives which help them
in the provision of input production, capital, processing coffee, and marketing .

Key word: self reliance, coffee farmers, cooperative

Introduction
Coffee has a very important role for the Indonesian economy. The role of coffee,
among others: (1) coffee plantation is a farming enterprise which is a source of farmer's
income (Martin, et. all, 2016), (2) The management of coffee commodities has opened up
opportunities for farmers, and creates employment opportunities for collectors to exporters,
large plantation workers and coffee processing industry workers (Prasetia, et. all, 2015).
The ability of farmers to know, master, understand, and carry out technical
cultivation of crops improve the independence and success of farmers (Suprayitno, 2011).
The independence of farmers in doing coffee agroforestry business is quite good, but the
independence in the production process is not good. Low levels of formal education, lack of
experience in the cultivation of coffee crops, and lack of training in cultivation techniques
make farmers less confident in running their agroforestry enterprises. Farmers still need the
help of others to do their business in the production process (Aprolita, et al., 2008).
Aspects that affect the level of self reliance of farmers in the management of
community forests are: managerial aspects, aspects of technical ability, and aspects of social
skills. Social skills are defined as the ability of farmers to connect with outside parties such as
peasants, government officials (village, sub-district, district and others), private parties, non-
governmental organizations and others. Farmers with high social capability will be able to
obtain information such as access to capital / credit, marketing, science and technology in
solving the problems faced in community forest management (Rohimat, 2014). This shows
that the empowerment of farmers is still diverse.
Empowering farmers can be done through the development of agribusiness
cooperatives with the approach of self reliance and competitiveness through the development
of centers of superior commodity production or agribusiness development area (Rangkuti,
2009). To realize self reliance, the role of the cooperative becomes very important. The role
of cooperatives in dairy agribusiness include: (1) providing production facilities in the form
of: concentrate feed, seed procurement and animal health services; (2) in milk marketing,
cooperatives play a role in collecting milk products from breeders; (3) in the development of
breeders, cooperatives through their apparatus to conduct and counseling in relation to
increase production and quality (Purwantini, 2014).
According to Kazi Kamrul Islam et al (2018), Cooperatives can be interpreted in
different ways, and in general, a cooperative is a member-owned, member-controlled
business that distributes benefits on the basis of use. The farmer cooperative simply refers to a
business organization that plays a significant role by way of different services (e.g., credit,
equity, information), function (e.g., product buying and selling, transportation, storage,
grading) and welfare (e.g., health care, education). That means that a farmer cooperative is a
legal and institutional body that enables the collective action of its own members, who can
then collectively compete within the context of other types of business organizations. Here,
the important thing is that the ownership and control of the enterprise must be in the hands of
farmers who utilize this service. Therefore, a farmer cooperative is an organization that is
owned and controlled by the people who use its services, functions, and welfare. An ideal
cooperative in the agriculture sector may form by the farmers/producers as a business
organization and, at the same time, provide different functions and welfare as per the needs of
farmers (Figure 1), which is the main focus of this study.
 Farmer Cooperatives Consumer

Organization

Services & Functions Welfare

Figure 1. Generic structure of an ideal farmer cooperative.

Bibby and Shaw (2005) in Yamusa Innocent and Adefila, J. O (2014) noted that today
in an era where many small-holder farmers feel powerless to change their lives, co-operatives
can serve as a strong, vibrant and viable economic alternative. that cooperatives are based on
the powerful idea that togetherness of people can achieve goals that none of them can achieve
individually. It has been considered as a third force, an alternative and countervailing power
to both big business and government. Agricultural co-operatives encourage members to
engage in joint cultivation of food and cash crops, purchase farm inputs at subsidized price
and create better producers’ price for their farm products. In view of the low financial
capacity and high level of under-development, an individual farmer cannot achieve the
desires for large-scale production. It is therefore in the farmers’ interest that resources are
pulled together so as to gain a tremendous collective advantage and thus widening the
industrial base of the economy and the management technique. For instance, farmers’ co-
operative societies are formed to bring in more agricultural inputs and product marketing
services to members, increase competition in the agricultural service sector and provide
savings and credit to members,among many other functions. Small holder farmers stand a
better chance with the formation of agricultural co-operatives
Farmers in Sidomulyo village, Silo district, Jember district, Indonesia have long
known coffee cultivation. Kerjamasa with fellow farmers and social ligkungan an important
factor in realizing self reliance. Coffee farmers get coaching from various parties to improve
the quality of farmers and the quality of their production. The existence of cooperatives in the
village felt many benefits by farmers. The problem that arises is how the role of cooperatives
in strengthening the self reliance of coffee farmers.
Research methods
The study used case study, that is the case in coffee farmer in Sidomulyo Village,
Silo District, Jember District, East Java. The study was conducted intentionally in the village
with the consideration that: (1) the village is the center of coffee, (2) the farmer grows coffee
from generation to generation, and (3) able to export the coffee of the people, (4) there
Ketakasi cooperative.
The most important sampling procedure in qualitative research is how to determine
key informants or specific social situations that are full of information according to the
research focus (Kanto in Bungin, 2008). Informants are primary data sources in research.
Some of the requirements that need to be applied in the selection of key informants are: (1)
individuals directly involved in coffee agribusiness; (2) members of an active and cooperative
farmer group; (3) able to provide information on coffee agribusiness; (4) able to provide
information on coffee farmers' activities; (5) able to provide information on cooperative
activities; (6) the informant is an honest person, capable of speaking and being open. Key
informants who meet these requirements are deliberately determined by the head of the
cooperative who concurrently serves as the head of the farmer group. Determination of
supporting informants was done using snowball sampling.
Data collection is done by in-depth interviews, observation and documentation. In-
depth interviews were conducted on key informants and supporting informants to obtain
information on: (1) self reliance of coffee farmers; (2) the role of cooperatives in
strengthening the self reliance of coffee farmers. Observations were made to see coffee
farmers' activities and cooperative activities. Documentation is used to collect secondary data
relevant to the research.
Data analysis is done qualitatively. Miles and Huberman (1984) suggested that the
activity in qualitative data analysis is done interactively and continuously to complete so that
the data is saturated. Activities in data analysis are data reduction, data display and
conclusion drawing / verification.

Research Results and Discussion

Self reliance of coffee farmers
Sastroputro (1988) defines self reliance as the ability of a group / society with its
own consciousness and initiative to pursue efforts to meet needs. From this definition, the
keyword self reliance is the ability to meet its needs. The needs of farmers in coffee
agribusiness that determine the success of the cultivation of coffee, namely (1) the technique
of production facilities, (2) the production process / cultivation, (3) postharvest and
processing techniques (agroindustry), and (4) marketing system (Tim Karya Tani Mandiri,
2010). The ability of farmers to meet these four factors indicates self reliance.

Self reliance in fulfilling the means of production.

Important production facilities needed in the cultivation of coffee are land, superior
seeds, water, fertilizers, and pesticides. Farmers use many dry land for the cultivation of
coffee crops. Coffee plants are an annual crop that can grow on dry land. Irrigation for coffee
plants rely more heavily on rainwater. To get a quality coffee plant, farmers rejuvenate the
old coffee crops and make the stem grafting. Entres of superior plants were obtained from the
Coffee and Cocoa Research Center. Farmers get intensive coaching from the coffee research
center. Farmers use 2 kinds of fertilizer, namely organic fertilizer and inorganic fertilizer
(chemical). Organic fertilizers are obtained from livestock manure. Chemical fertilizers can
be purchased at the Ketakasi Fruit cooperative in the village. Cooperatives also provide
pesticides that farmers need to eradicate pests and diseases. Farmers are self-sufficient in the
procurement of means of production, meaning the needs of production facilities can be met in
the village. The results of Prasetia's (2015) study, which states that farmers generally use the
resources of even some farmers to borrow equipment to other farmers, but coffee growers can
grow, independent, and income increase after following farmer groups. Institutions capable of
supporting the self reliance of farmers in the village Sidomulyo other than farmer groups is a
cooperative.

Self reliance in the production process / cultivation of coffee plants

The cultivation of coffee crops was studied by farmers from generation to

generation. In addition, farmers get guidance on good coffee cultivation from Plantation
Service, Coffee and Cocoa Research Center and Jember University. Coffee is a drink that
many people love, so the demand for coffee is increasing. The large number of coffee
demand is what ensures the sustainability of coffee cultivation. Technically farmers have
mastered the way of coffee cultivation. Farmers in the village of Sidomlyo plant Robusta
coffee.
Coffee farming starts from land preparation, planting coffee seedlings, shade
arrangements, pruning, fertilizing, pest and disease management, harvesting, and post-harvest
processing. According to Saptana (2013), the technology that needs attention when
management in the garden is the stage of pruning the canopy of the plant that is done every
once a year. This has been done well by farmers in Sidomulyo village. Farmers apply semi-
organic farming using organic fertilizers and biopesticides.

Self reliance in post-harvest handling and processing

Coffee that has been picked must be processed further and should not be left alone
for more than 12-20 hours. If the coffee is not processed immediately within that time period
then the coffee will undergo fermentation and other chemical processes that can reduce the
quality. Processing of coffee beans can be done in two ways, namely by wet and dry. The
quality of coffee if wet is better. In addition to processing coffee beans into coffee beans,
farmers also do the processing of coffee frying pan

Self reliance in marketing

Indonesia's robusta coffee export volume in the next ten years has good prospects
(Candra, 2013). This condition makes it easier for farmers to market coffee. Farmers can sell
their coffee to middlemen, merchants and cooperatives. Many traders come to Sidomulyo
Village, so farmers do not have difficulty in marketing coffee.

The Role of Cooperatives in Strengthening Coffee Farmer's Self reliance.

Coffee farmers in Sidomulyo village have an all-round cooperative business (KSU)
named Fruit Ketakasi. The cooperative was formed on December 19, 2007 and the
legalization date of the Legal Body is BH.No 518 / 500.BH / XVI.7 / 463.313 / 2007. Fruit
Name Ketakasi is an abbreviation of the Fruit Group Thought Coffee Farmer Sidomulyo
Village.
The existence of cooperatives has an important role in strengthening the self
reliance of farmers. Cooperative all business of Fruit Ketakasi have 4 business unit that is: (1)
Savings and Loans Unit. Savings and Loans Unit provides loan facilities to members. The
existence of this facility facilitates farmers to meet the needs of venture capital; (2)
Production facilities unit. This unit helps farmers access government assistance in the form of
subsidized fertilizer. Fertilizers sold in cooperatives include ZA fertilizer, Urea, NPK
Phonska, SP-36, and organic fertilizer. In addition, the cooperative also provides pesticides
that farmers need. Sibuea (2016) stated that the provision of production facilities, seeds,
fertilizer has a significant effect on farmer's income, while giving pesticide has no significant
effect. This indicates that the availability of production facilities reinforces the self reliance of
farmers in meeting their needs and can increase revenues; (3) Service units, consisting of
photocopying and canteen services; and (4) Production Units. This unit produces HS (R /
WP) coffee, coffee ose (R / DP), and Ketakasi powder coffee (18 grams, 50 grams, 160
grams, and 250 grams). Coffee material to be processed is purchased from farmers.
Production units strengthen farmers' self-reliance in processing of coffee and marketing. Co-
operative business Ketakasi able to strengthen the self reliance of farmers in the fulfillment of
business capital, production facilities and processing of coffee and marketing.
Formerly coffee farmers were depended on coffee buyers for credit services and
advance payments although these services are no longer available due to unreliable coffee
supply. In addition, farmers have been forced to sell fair average quality coffee, which is then
processed by the buyer/exporter at a fee. This implies that the risk of quality losses is
incurred by the farmers/middlemen. This arrangement in a way gives an opportunity to the
buyer/exporter to dictate the price offered to the farmer (Bashasha, 2004).
The results of Suryani (2012) show that Ketakasi's all-round business cooperatives
provide positive impacts such as easy access to capital, increasing coffee productivity,
employment absorption and income increase. This shows that the existence of cooperatives
can strengthen the self reliance of farmers. The availability of farming capital strengthens the
farmers in fulfilling the production facilities. The adequacy of production means strengthens
farmers in better coffee cultivation. Good cultivation ability can increase coffee productivity.
Increased coffee production supported by market guarantees can increase revenue. The
existence of production units in cooperatives also can absorb the labor of the surrounding
community.

Conclusion
The self reliance of farmers in coffee agribusiness can be seen from its ability to
meet production facilities, good coffee cultivation process, post-harvest handling, and
marketing. The self reliance of coffee farmers is strengthened by the existing Ketakasi
cooperatives in the village. Ketakasi Cooperative has a savings and loans unit, production
unit, service unit and production unit. The role of cooperatives in strengthening the self
reliance of coffee farmers can be seen from the ability of cooperatives in providing business
capital loans, fertilizers and pesticides, processing of coffee beans into coffee beans and
processing of coffee powder, and coffee marketing.
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