1 DETERMINANTS OF SUGARCANE AND TOBACCO FARMER

2 PARTICIPATION IN FARMER GROUP, ASSOCIATION AND

3 COOPERATIVES IN INDONESIA
4 Determinan Keanggotaan Petani Tebu dan Tembakau dalam
5 Kelompok Tani, Asosiasi Petani dan Koperasi Usaha Tani di
6 Indonesia
7 Rokhania,b , Diana Fauziyahb,c, Agus Suprionob,c, Yuli Hariyatib,c, Sugeng Rahartob,c,
8 Triana Dewi Hapsarib,c, Ad Hariyanto Adic, Ahmad Fatikhul Khasanc, Mohammad
9 Rondhib,c

10 a
Department of Agricultural Extension, University of Jember
11 b
Department of Agribusiness, University of Jember
12 c
Institutional Economic for Agribusiness Reforms and Development (INFRARED) Research
13 Group, University of Jember
14 b
Department of Agribusiness, University of Jember
15 Corresponding author: rokhani@unej.ac.id
16
17
18 Abstract. Revitalization of farmer organizations has become the central paradigm in
19 agricultural development. In Indonesia, increasing farmer participation in farmer group,
20 association and cooperative are one of the strategies to revitalize farmer organizations.
21 The purpose of this study was to determine the determinants of farmers' participation in
22 farmer group, association and cooperative. The data used in the study were obtained
23 from the 2014 Sugarcane and Tobacco Plantation Farm Household Survey which
24 included 12,485 farmers and consisted of 8831 (70.73%) sugarcane farmers and 3645
25 (29.27%) tobacco farmers. Logistic regression analysis was used to identify the
26 determinants of farmer participation in each organization. The results showed that
27 harvest area, access to extension, and contract farming had a positive effect on farmer
28 participation in each organization. Farmers' age and education have a positive effect on
29 association and cooperatives but do not have a significant effect on farmer group
30 participation. Land tenure has varying effects on farmer participation in each organization.
31 Tenant farmers are less likely to participate in farmer group and cooperative, but they
32 tend to participate in an association. Meanwhile, the owner farmers are less likely to
33 participate in the cooperative. Government assistance has a positive effect on farmer
34 group, a negative effect on the association, and non-significant effect on participation in
35 the cooperative. Finally, farmers' wealth has a positive effect on participation in the
36 cooperative, a negative effect on the association, and non-significant effect on farmer
37 group. These results indicate that farmer groups are more inclusive than cooperatives
38 and associations.

39 Keywords: Farmer Group, Farmer Association, Farmer Cooperatives, Sugarcane,

40 Tobacco, Survey of the Plantation Farm Household

41 Abstrak. Revitalisasi organisasi petani menjadi paradigma utama dalam pembangunan

42 pertanian. Meningkatkan partisipasi petani dalam kelompok tani, asosiasi dan koperasi
43 menjadi salah satu strategi revitalisasi organisasi petani di Indonesia. Tujuan penelitian
44 ini adalah mengetahui determinan partisipasi petani tebu dan tembakau dalam kelompok
45 tani, asosiasi dan koperasi. Data yang digunakan dalam penelitian diperoleh dari Survei
46 Rumah Tangga Usaha Perkebunan komoditas tebu dan tembakau tahun 2014 yang
47 memuat 12.485 petani dan terdiri dari 8831 (70,73%) petani tebu dan 3645 (29,27%)
48 petani tembakau. Analisis regresi logistik untuk mengetahui digunakan untuk mengetahui
49 determinan keanggotaan petani dalam kelompok tani, asosiasi, dan koperasi. Hasil
50 penelitian menunjukkan bahwa luas panen, akses terhadap penyuluhan, dan kemitraan
 2

51 berpengaruh positif terhadap keanggotaan petani dalam kelompok tani, asosiasi dan
52 koperasi. Usia dan pendidikan petani berpengaruh positif terhadap keanggotaan petani
53 dalam asosiasi dan koperasi, tetapi tidak berpengaruh signifikan terhadap keanggotaan
54 dalam kelompok tani. Kepemilikan lahan memiliki pengaruh yang beragam terhadap
55 keanggotaan petani. Petani penyewa cenderung tidak menjadi anggota kelompok tani
56 dan asosiasi, tetapi cenderung ikut asosiasi. Sementara itu, status lahan milik
57 berpengaruh negatif terhadap keanggotaan dalam koperasi, tetapi tidak signifikan dalam
58 kelompok tani dan koperasi. Bantuan pemerintah berpengaruh positif terhadap
59 keanggotaan petani dalam kelompok tani, berpengaruh negatif terhadap keanggotaan
60 dalam asosiasi, dan tidak signifikan dalam keanggotaan koperasi. Kekayaan petani
61 berpengaruh positif dalam keanggotaan koperasi, berpengaruh negatif dalam
62 keanggotaan asosiasi, dan tidak signifikan terhadap keanggotaan kelompok tani. Hasil ini
63 mengindikasikan bahwa kelompok tani merupakan organisasi yang lebih inklusif
64 dibandingkan koperasi dan asosiasi.

65 Kata Kunci: Kelompok Tani, Asosiasi Petani, Koperasi Usahatani, Tebu, Tembakau, Survei
66 Rumah Tangga Usaha Perkebunan
67 INTRODUCTION

68 Smallholder agriculture is the foundation for agricultural and rural

69 economic development in developing countries (World Bank 2008). Farmer

70 empowerment through collective action institutions is an effort made to

71 achieve the goal of this development (IFAD 2011). In line with this, farmer

72 organizations are an essential part of the Indonesian Ministry of Agriculture's

73 Strategic Plan 2020-2024 (KEMENTAN 2020). Furthermore, the Food and

74 Agricultural Organization (FAO) identifies that multilateral agricultural

75 institutions can facilitate farmer participation in supporting the development

76 process (FAO 2009). The leading farmer-level institutions that can support

77 agricultural development are farmer groups, farmer associations and farming

78 cooperatives (Lopulisa et al. 2018).

79 Farmers' organization are expected to facilitate farm production and

80 assist farmers in marketing agricultural products (Shiferaw, Obare and

81 Muricho 2008). In line with this opinion, Thorp, Stewart and Heyer (2005)

82 revealed that farmer organizations could help farmers reduce market entry

83 barriers by increasing bargaining power against buyers and intermediaries.

84 For example, in Tanzania, farmer organization help farmers in terms of

85 capital and improve marketing skills and strengthen farmer collective action

86 (Barham and Chitemi 2009). Increased bargaining power of farmers can

87 increase farm production and farmer welfare which is the goal of agricultural

88 development (Courtois and Subervie 2014). Also, farmer organization play a

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89 role in increasing farm productivity, reducing risk and transaction costs

90 (Ncube 2020).

91 In increasing farm productivity, farmers collectively form organizations

92 to obtain a large quantity of farm inputs at low cost and in good quality

93 (Liverpool-Tasie 2014). Farmer organizations also increase access to market

94 information and market power by strengthening bargaining power (Abu,

95 Issahaku and Nkegbe 2016). Furthermore, farmer organizations play a role

96 as a channel for new information and technology (Zhou et al. 2019). Farmers

97 with access to information and technology can play a crucial role in improving

98 good farming practices (Ji et al. 2019). Thus, a strong farmer organization will

99 improve market access, technology and information that contribute to farming

100 growth and productivity (Shiferaw, Hellin and Muricho 2011).

101 Empirically, several studies show that farmer organizations have a

102 positive impact on farm performance. Utaranakorn and Yasunobu (2016)

103 explain that organic vegetable farmer groups in Thailand strengthen social

104 networks between farmers. In line with this, Ainembabazi et al. (2017)

105 revealed that membership in farmer groups increased adoption of the latest

106 technology. Also, the participation of rice farmers in farmer groups in Ghana

107 has a significant effect on increasing farm productivity and efficiency (Abdul-

108 Rahaman and Abdulai 2018). The positive impact was also shown by the

109 participation of farmers in farmer associations and cooperatives. Smith (2013)

110 states that farmer association in Malawi facilitates market access and

111 provision of financial capital. In line with that, Matchaya (2010) revealed that
112 in addition to market access, farmer association could provide access to

113 credit. Furthermore, in apple farming in China, farming cooperatives become

114 a collective means of reducing agricultural risk (Jin, Jia and James 2020).

115 Farming cooperatives also have an impact on the welfare of member farmers

116 (Yu and Huang 2020) and become a forum for branding for member farmers

117 (Grashuis 2017).

118 Participation in farmer organizations provides opportunities for farmers

119 to participate in the economy, market and can take advantage of the

120 organization (Abaru, Nyakuni and Shone 2006). In Indonesia, the percentage

121 of sugarcane farmers who participated in farmer groups is 30.51%, farmer

122 associations 15.25% and farming cooperatives 5.28%. In comparison,

123 tobacco farmers participation in farmer groups is 23.75%, farmer

124 associations 3.12% and farming cooperatives 0.52% (BPS-Statistics

125 Indonesia 2016). Previous studies on sugarcane and tobacco farmers

126 participation in farmer organizations have been carried out extensively.

127 Studies on farmer participation in several types of farmer

128 organizations have been widely conducted. The first group of studies focused

129 on farmer group, for example, studies on sugarcane farmer groups in Malang,

130 East Java (Anam 2013) and tobacco farmer groups in Wonosobo, Central

131 Java (Cahyono 2014). Both studies show that social capital underlies farmer

132 participation in farmer group. The second group focused on farmer

133 association—for example, studies on sugarcane farmer association in

134 Situbondo, East Java (Yuniati, Susilo and Albayumi 2017) and tobacco
 6

135 farmer association in Cirebon, West Java (Baga and Setiadi 2008; Hakim

136 and Wibisono 2017). The studies show that participation in farmer

137 associations solves farmer's problems, improve their welfare and bargaining

138 position. The third group focused on farmer cooperatives, for example,

139 studies on sugarcane farmer cooperatives in Sleman, Yogyakarta (Saputra,

140 Sayekti and Purwandari 2017) and tobacco farmer cooperatives in

141 Sumedang, West Java (Santoso et al. 2017). These studies indicate that

142 farmer participation in cooperative is determined by internal and external

143 factors of the cooperative and its role for farmers.

144 Although there are many studies on farmer group, farmer association,

145 and cooperative, these studies analyzed each organization separately. Thus,

146 this study aims to identify the determinant of sugarcane and tobacco farmers

147 participation in farmer groups, farmer associations and farming cooperatives.

148 This study is essential because each farmer organizations have different

149 fundamental principles. Farmer group is an organization formed by the

150 government, while association and cooperative are established

151 independently by farmers. So the farmer's participation motive in each

152 organization is different. Hence, it is crucial to analyze all types of the

153 organization simultaneously. Furthermore, this study used nationally-

154 representative data of sugarcane and tobacco farmers in Indonesia. Thus,

155 this study contributes to policymaking at the national level.

156

157
158 METHODS

159 Data

160 This study used data from the 2014 Indonesian Plantation Farm

161 Household Survey (SKB14) for sugarcane and tobacco. SKB14 is a part of

162 the 2013 Agricultural Census (ST13) covering various plantation crops.

163 Based on the economic importance, the plantation crops are grouped into

164 national and provincial primary crops—sugarcane and tobacco belong to

165 provincial primary crop (BPS-Statistics Indonesia 2016). SKB14 used a two-

166 stage stratified sampling method. The first stage is the selection of census

167 blocks using a systematic probability proportional to size method. The

168 second stage is the selection of plantation farm household based on the

169 number of plantation farm households in each census block.

170 Table 1 contains descriptive statistics of the data. The data contains

171 12,485 farmers consisting of 8831 sugarcane farmers (70.7%) and 3654

172 tobacco farmers (29.2%). The majority of sugarcane and tobacco farmers in

173 Indonesia are located in Java. The percentage of sugarcane and tobacco

174 farmers in Java is 96.8% and 61.5% respectively. Meanwhile, 37.7% of

175 tobacco farmer is located in Bali and Nusa Tenggara, and no sugarcane

176 farmer is in this region. The percentage of sugarcane and tobacco farmer in

177 Kalimantan and Sulawesi is relatively small, only 2.1% and 0.6% respectively.

178 A similar situation is found in Sumatera, where the percentage of sugarcane

179 and tobacco farmers is only 1.03% and 0.03% respectively. On average,

180 sugarcane farmers are four years older than tobacco farmers. However, the

181 majority of farmers in each group have primary education. In general,

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182 sugarcane and tobacco farm household in Indonesia are male-headed, but

183 the percentage of wealthy farm households is higher in the former than the

184 latter.

185 Table 1. Descriptive Statistics of Data

Mean dan Frequency
Variable Description
Sugarcane Tobacco
Dependent Variable
Farmer Group 1 = Participate, 0 = Not participate 1 : 2694 (30.5) 1 : 868 (23.7)
0 : 6137 (69.4) 0 : 2786 (76. 2)
Association 1 = Participate, 0 = Not participate 1 : 1347 (15.2) 1 : 114 (3.1)
0 : 7484 (84.7) 0 : 3540 (96.8)
Cooperative 1 = Participate, 0 = Not participate 1 : 466 (5.2) 1 : 19 (0.5)
0 : 8365 (94.7) 0 : 3635 (99.4)

Crop 1 = Tobacco, 2 = Sugarcane 8831 (70.7) 3654 (29.2)

The harvest area of each crop

Harvest Area
(Hectar) 0.68 1.29
Land Tenure The ownership of cultivate land (1 1 : 7163 (81.1) 1 : 2967 (81.2)
=Owned Land, 2 = Leased Land, 3 2 : 1098 (12.4) 2 : 633 (17.3)
= Sharecropping) 3 : 570 (6.4) 3 : 54 (1.4)
Age of head of farm household
Age
(Year) 51.59 47.62
Education Formal education of head of farm
1 : 6288 (71.2) 1 : 2898 (79.3)
household (1 = Elementary
Education (SD), 2 = Middle 2 : 2251 (25.4) 2 : 648 (17.7)
Education (SMP-SMA), 3 = Higher
Education (D1-S3)) 3 : 292 (3.3) 3 : 108 (2.9)
Gender The sex of head of farm household 1 : 7974 (90.3) 1 : 3419 (93.5)
(1 = Male, 0 = Female) 0 : 857 (9.7) 0 : 235 (6.4)
Extension 1 : 1383 (15.6) 1 : 665 (18.2)
1 = Receive, 0 = Not Receive
0 : 7448 (84.3) 0 : 2989 (81.8)
Government Support 1 : 4004 (45.3) 1 : 2311 (63.2)
1 = Receive, 0 = Not Receive
0 : 4827 (54.6) 0 : 1343 (36.7)
Contract Farming 1 : 3036 (34.3) 1 : 594 (16.2)
1 = Participate, 0 = Not participate
0 : 5795 (65.6) 0 : 3060 (83.7)
Wealth 1 : 6290 (71.2) 1 : 2166 (59.2)
1 = Wealthy, 0 = Poor
0 : 2541 (28.7) 0 : 1488 (40.7)
Region 1 = Java, 2 = Sumatera, 3 = Bali
1 : 8550 (96.8) 1 : 2248 (61.5)
and Nusa Tenggara, 4 =
Kalimantan and Sulawesi, 5 = 2 : 91 (1.03) 2 : 1 (0.03)
Maluku and Papua 3 : 0 (0) 3 : 1381 (37.7)
4 : 190 (2.1) 4 : 24 (0.6)
5 : 0 (0) 5 : 0 (0)
186 Source : (BPS-Statistics Indonesia 2016)

187 In general, the majority of sugarcane and tobacco farmer cultivate their

188 land, with a total of 81.1% and 81.2% respectively. Meanwhile, the
189 percentage of tobacco farmer that cultivate on leased land is higher, with a

190 total of 17.3%, compared to sugarcane farmer that is only 12.4%. In contrast,

191 the number of sugarcane farmer who cultivates on sharecropping land is

192 higher, with a total of 6.4%, compared to tobacco farmer that is only 1.4%.

193 The harvest area of tobacco farmer is higher than that of sugarcane farmer.

194 The average harvest area for tobacco and sugarcane farmer is 1.29 and 0.68

195 hectares, respectively. Sugarcane farmer participation in all types of farmer

196 organizations is higher than that of tobacco farmer. The percentage of

197 sugarcane farmer participating in farmer group, association and cooperative

198 is 30.5%, 15.2% and 5.2%, while for tobacco farmer is 23.7%, 3.1% and

199 0.5%, respectively. The number of sugarcane and tobacco farmer receiving

200 extension service is relatively the same at 15.6% and 18.2%, respectively.

201 However, a larger number of tobacco farmer received government assistance

202 (63.2%) than sugarcane farmer (45.3%). In contrast, the number of

203 sugarcane farmers participating in contract farming (34.3%) is twice higher

204 than that of tobacco farmer (16.2%).

205 Empirical Model

206 This study used a logistic regression model to estimate the

207 determinants of sugarcane and tobacco farmer participation in farmer group,

208 association and cooperative. Logistic regression is used to estimate the

209 effect of independent variables on a binary dependent variable (Abonazel et

210 al. 2018). The dependent variable in this study is farmer participation in

211 farmer groups, associations and cooperatives. Equation 1 formulates the

212 logistic regression model in this study.

 10

13
b0   bi xi
 p  e i 0

Yi  ln  i  , i  1,2, K,11 (1)

 1  pi
13

 b0   bi xi
1 e i 0

213 Where Yi represents farmer participation in farmer organization, X1-11

214 are the independent variables, b0 is the constant, b1-11 are the coefficient of

215 each independent variable. Omnibus Test of Model Coefficient, Pseudo R2

216 and -2 log likelihood was used to evaluate the fitness of logistic regression.

217 Omnibus Test of Model Coefficient and Pseudo R2 values were used to

218 explain the effect of independent variables on the dependent variable.

219 Meanwhile, -2 log-likelihood value was used to evaluate the overall

220 relationship between the dependent and independent variables. Finally, the

221 effect of each independent variables was estimated using the regression

222 coefficient.

223 RESULT AND DISCUSSION

224 RESULT

225 This study estimated Equation 1 for each farmer organization. The

226 estimation results show that the model is robust. Eight independent variables

227 have a significant effect on farmer participation in farmer group, ten variables

228 in association and nine variables in the cooperative. The regression model

229 has a significant Omnibus Test of Model Coefficient value at the 1% level. It

230 means that the independent variables significantly explain the variance of

231 farmer decision to participate in farmer organizations.

232 The crop type has a positive and significant effect on farmer

233 participation in each organization. The result demonstrates that sugarcane

234 farmer has a higher probability of participating in farmer group, association

235 and cooperative than tobacco farmer. Similarly, harvest area has a positive

236 and significant effect on farmer decision to participate in each organization.

237 Owned land has a negative and significant effect on farmer decision to

238 participate in cooperative but not in farmer group and association. Meanwhile,

239 tenant farmer tends to participate in association but not in farmer group, and

240 cooperative. Farmers with access to extension and participated in contract

241 farming tend to participate in farmer group, association and cooperative.

242 Then, government assistance increases farmer participation in farmer group,

243 but reduces participation in the association and does not have a significant

244 effect on farmer participation in the cooperative.

245 Farmer age has a positive and significant effect on farmer decision to

246 participate in farmer group, association and cooperative. But, gender does

247 not have a significant effect on farmer participation in all types of organization.

248 Farmer education does not have a significant effect on participation in farmer

249 groups; however, farmer with higher education tend to participate in

250 association and cooperative. Wealthy farmers tend to be a member of

251 cooperative while poor farmer tends to participate in the association, but this

252 farmer wealth has no significant effect on farmer participation in farmer group.

253 Regional variables show that farmers in Java tend to be a member of a

254 cooperative but not farmer group and association. Farmers in Sumatra tend
 12

255 to participate in farmer group. In contrast, farmers in Bali and Nusa Tenggara

256 do not tend to participate in farmer group and association.

257 Table 2. Estimation Result of Logistic Regression for Each Organization

Farmer Group Association Cooperative
Variable
Coeff Sig. OR Coeff Sig. OR Coeff Sig. OR
Intercept -1.820 0.000* 0.162 -3.835 0.000* 0.022 -7.804 0.000* 0.000
Crop (2) 0.157 0.022** 1.171 0.834 0.000* 2.303 1.592 0.000* 4.913
Harvest Area 0.026 0.015** 1.027 0.082 0.000* 1.085 0.054 0.000* 1.055
Land Tenure 0.000* 0.005* 0.000*
(Owned) 0.122 0.250 1.129 0.183 0.227 1.201 -0.934 0.000* 0.393
(Leased) -0.338 0.006* 0.713 0.446 0.008* 1.562 -1.000 0.000* 0.368
Age -0.001 0.718 0.999 0.016 0.000* 1.016 0.008 0.082*** 1.008
Education 0.001* 0.000* 0.000*
(Elementary) -0.089 0.482 0.915 -0.410 0.012** 0.664 -0.609 0.005* 0.544
(Middle) 0.126 0.332 1.134 -0.022 0.893 0.978 -0.153 0.484 0.858
Gender (1) 0.128 0.122 1.137 -0.096 0.397 0.908 0.188 0.363 1.207
Extension (1) 1.689 0.000* 5.415 1.243 0.000* 3.466 1.204 0.000* 3.332
Gov. Support (1) 0.151 0.001* 1.163 -0.141 0.031** 0.869 0.103 0.312 1.108
Cont. Farm (1) 1.329 0.000* 3.778 1.680 0.000* 5.365 2.176 0.000* 8.812
Wealth(1) 0.038 0.462 1.038 -0.140 0.051*** 0.870 0.201 0.092*** 1.223
Region 0.000* 0.000* 0.052***
Java -0.420 0.013** 0.657 -1.293 0.000* 0.274 0.545 0.034** 1.725
Sumatera 2.760 0.000* 15.797 -21.680 0.996 0.000 -18.595 0.996 0.000
Bali & NTT -0.444 0.018** 0.642 -3.009 0.000* 0.049 -0.349 0.516 0.706
Model Robustness
Omnibus Test 2696.1 0.000* 2273.0 0.000* 1045.1 0.000*
Cox and Snell R2 0.194 0.166 0.080
Nagelkerke R2 0.278 0.324 0.287
N 12485 12485 12485
258 Note : *) Sig at 1%. **) Sig at 5%. ***) Sig at 10%
259 Source : Author 2020

260 DISCUSSION

261 Crop type has a positive and significant effect on farmer participation

262 in farmer group with an odds ratio of 1.171, in association with an odds ratio

263 of 2.303 and cooperatives with an odds ratio of 4.913. Crop type is a

264 categorical variable with sugarcane as a reference category. It means that

265 sugarcane farmer is 17.1% more likely to participate in farmer group, 130.3%

266 to participate in association and 391.3% more likely to participate in

267 cooperative compared to those of tobacco farmer. The result demonstrates

268 that sugarcane farmer is more likely to participate in farmer group but only

269 slightly higher than the tobacco farmer. In contrast, the probability of

270 sugarcane farmer participating in association and cooperative is substantially

271 higher than those of tobacco farmers. The sugarcane farmer association in

272 Indonesia is APTRI (Association of Indonesian Sugarcane Smallholder

273 Farmer). The sugarcane farmer intensively used the association to increase

274 their bargaining power over the sugar mill (Suwandari et al. 2020). Thus, the

275 tendency to participate in the association is higher for sugarcane farmer.

276 Similarly, the probability of sugarcane farmer participating in cooperative is

277 higher than tobacco farmer. It is because sugarcane farmer receives farm

278 input from the sugar mill, that distributes the input trough cooperative (Rondhi

279 et al. 2020).

280 Harvest area has a positive and significant effect on farmer

281 participation in farmer groups with an odds ratio 1.027, in association with an

282 odds ratio 1.085, and cooperatives with an odds ratio 1.055. The result

283 demonstrates that an increase of 1 hectare in the harvest area increases the

284 probability of participation in farmer group, association and cooperatives by

285 2.6%, 8.5% and 5.5% respectively. This finding is in line with those of

286 previous studies. For example, in Middle Guinea, where potato farmer with a

287 large harvest area tend to participate in farmer groups to obtain farm input

288 and capital (Tolno et al. 2015). Similarly, in Mozambique, a large harvest

289 area increases farmer participation in association to obtain farm technology

290 (Sitoe and Sitole 2019). Also, in Rwanda, the coffee farmers with large tracts

291 of land tend to join cooperatives (Issa and Chrysostome 2015). A large
 14

292 harvest area increases farm risk for sugarcane and tobacco farmers. The

293 major farm risks are crop failure and low selling prices. Participation in farm

294 organization helps farmer mitigate these risks by obtaining quality input, new

295 farm technologies and increased bargaining power.

296 Land tenure is a categorical variable consisting of three types of

297 tenure: owned land, leased land and sharecropping that serves as a

298 reference category. The result shows that the owner farmer is 6.6% less

299 likely to participate in the cooperative. Meanwhile, the tenant farmer is 28.7%

300 and 63.2% less likely to participate in farmer group and cooperative but

301 56.2% more likely to participate in the association. The tenant farmers

302 usually rent farmland for a short period; since it helps avoid the expected risk

303 of agricultural production (Li and Shen 2021), it means that the tenant

304 farmers prioritize the mitigation of short term risk. Participation in association

305 increases farmer bargaining power over the buyer of their product. Thus,

306 tenant farmer mitigates the short term marketing risk through participation in

307 the association. In contrast, participation in farmer group and cooperative is

308 long term investment both in term of access to training and education

309 services (Jitmun et al. 2020). Thus, the tenant farmer chooses to not

310 participate in farmer group and cooperative.

311 Farmer age has a positive and significant effect on participation in the

312 association and cooperative but not farmer group. The odds ratio show that

313 an increase of one year in farmer age increases the probability of

314 participation in association and cooperative by 1.6% and 0.8% respectively.

315 The result demonstrates that the farmer group is more inclusive than its

316 counterpart. Also, the result suggests that association and cooperative are

317 the organization of old farmers. This result is in line with the study of Asante,

318 Afari-Sefa and Sarpong (2011) and Mwaura (2014) on Farmer Based

319 Organization (FBO) in Uganda. They found that old farmer tends to

320 participate in an organization that increase their bargaining power. In

321 Indonesia, association and cooperative are means to consolidate farmer to

322 increase their bargaining power.

323 This study grouped farmer education into three categories: elementary,

324 middle and higher education. The result demonstrates that farmer with

325 elementary education is less likely to participate in association and

326 cooperative by 98.8% and 45.6% respectively. It implies that the majority of

327 farmers who participate in association and cooperative have high formal

328 education. Association and cooperative requires a managerial ability which is

329 obtained from formal education (Issa and Chrysostome 2015). Furthermore,

330 the skill and knowledge of educated farmer play a crucial role to improve

331 cooperative in Ethiopia marketing capacity (Francesconi and Heerink 2011).

332 In contrast, education has no significant effect on participation in farmer

333 group because the farmer group is inclusive for all farmer. Gender has no

334 significant effect on farmer participation in the organization. It demonstrates

335 that there is no gender discrimination in the Indonesian farmer organization.

336 Agricultural extension has a positive and significant effect on

337 participation in farmer organization. Farmer with access to extension services

 16

338 is more likely to participate in farmer group by 441.5%, in association by

339 246.6%, and in cooperative by 233.2%. previous studies have associated

340 access to extension services to participation in farmer organization. For

341 example, in Cameroon, extension service is a facility obtained by a member

342 of a farmer organization (Guillaume and Kenette 2017). A similar result was

343 found in Mozambique, where participation in the association is closely related

344 to access to the extension because the extension officer promoted

345 microcredit and farmer training through association (Sitoe and Sitole 2019).

346 Government support has a positive and significant effect on

347 participation in farmer group. However, government support decreases

348 participation in the association and no significant in the cooperative. Farmer

349 receiving government support is 16.3% more likely to participate in farmer

350 group but 13.1% less likely to participate in the association. Farmer group is

351 government-promoted farm organization, and the government use farmer

352 group as a channel to distribute support to the farmer (Pelimina and Justin

353 2015). Thus, the farmer who receives government support is likely a member

354 of farmer group. Meanwhile, the association is formed by the farmer to

355 increase political and bargaining power (Smith 2013). Thus, the government

356 is less likely to distribute support to the farmer through association. In

357 contrast, the cooperative is an organization established by the farmer for

358 economical purpose. Furthermore, farmer use cooperative for commercial

359 branding and provide credit to the farmer (Grashuis 2017).

360 Contract farming positively affects participation in farmer group,

361 association and cooperative. Participation in contract farming increases

362 participation in farmer group, association and cooperative by 277.8%,

363 436.5% and 781.2% respectively. The contracting firm usually does not

364 contract directly to the farmer; instead, the firm use farm organization to

365 coordinate farmer. Thus, the majority of contract farmer is a member of a

366 farm organization. The result also demonstrates that contract farming effect

367 is highest on cooperative participation. It is because, in some cases,

368 cooperative also acts as the contracting firm, such as in Vietnamese rice

369 sector (Ba et al. 2019) and pineapple farming in Ghana (Wuepper and Sauer

370 2016). Furthermore, the success in contract farming is determinate by self-

371 efficacy and social capital, both of which can be obtained from participation in

372 farmer organization.

373 Farmer wealth significantly affects participation in cooperative and

374 association but not farmer group. Farmer wealth decreases participation in

375 the association by 13% but increases participation in cooperative by 22.3%.

376 Participation in cooperative requires capital participation from the farmer.

377 Thus, only a wealthy farmer can afford participation in the cooperative. For

378 example, cooperative in Greece requires a farmer to make capital

379 participation to strengthen cooperative marketing and extension capacity

380 (Kontogeorgos, Chatzitheodoridis and Theodossiou 2014). Meanwhile,

381 farmers participate in the association to increase their bargaining power by

382 acting collectively than acting individually. Thus, poor farmers are more likely

383 to participate in the association. For example, farmers in Malawi participate in

 18

384 the association to obtain market access and price guarantee (Smith 2013;

385 Matchaya 2010). In contrast, farmer wealth has no significant effect on

386 participation in farmer group because the farmer group is government

387 promoted organization, which aims to be inclusive to all farmers regardless of

388 their wealth.

389 CONCLUSION

390 This study aimed to identify the determinants of the Indonesian

391 sugarcane and tobacco farmers participation in farmer group, association

392 and cooperative. The estimation results show that harvest area, extension

393 access, government support and contract farming positively affect

394 participation in farmer group; in contrast, leased land decreases it.

395 Meanwhile, education, gender and wealth have no significant effect

396 participation in farmer group. Then, harvest area, leased land, age, extension

397 access, and contract farming positively affect participation in association but

398 elementary education government support and wealth decrease it.

399 Meanwhile, gender has no significant effect on participation in the association.

400 And last, harvest area, age, extension, contract farming and wealth positively

401 affect participation in cooperative, in contrast, owned land, leased land and

402 elementary education decreases it. Meanwhile, gender and government

403 support have no significant effect on participate the cooperative.

404 ACKNOWLEDGEMENT

405 We wish to acknowledge LP2M Universitas Jember for supporting this

406 study. This study was funded under 2020 Research Group grant, grant

407 number: 11872/ON25/LT/2020.

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