SUPPLY CHAIN AND MARKETING OF POSTPRODUCTION

RICE IN BALI PROVINCE Ni Nyoman Reni Suasih, Ni Nyoman Yuliarmi*

* Corresponding author:

Faculty of Economic and Business, University of Udayana, Denpasar, Indonesia

Abstract

Rice is a major staple food for Indonesians, and its production also provides livelihood for

million Indonesian farm households. But, rice farmer’s income in Indonesia is remain low.

One of the reason is the price of postharvest rice is low if compare with the production cost.

The aim of this research is to analyze: (1) the supply chain of postproduction rice; (2)

marketing efficiency of postproduction rice; and (3) the role of government to increase the

efficiency of postproduction rice marketing. The method used in this research is quantitative

and qualitative analysis. The results show that: (1) the supply chain of postproduction rice in

Bali is still long and the efficiency of marketing institution is yet; (2) marketing of

postproduction rice is efficiency yet; and (3) the role of government to increase the efficiency

of postproduction rice are regulating function, educating function; and also balancing

function.

Key words

Supply chain; Marketing efficiency; Marketing margin; Producer market expansion; Elasticity

of price transmission; structure-conduct-performance

Introduction

In general the income received by farmers is not adequate compared with the efforts that have

been issued plus the risk of crop failure. The level of income received by farmers based on a

variety of factors that affect the productivity of the land. Some indicators show that in some

areas, many farmers (especially rice farmers) who do not enjoy the fruits of his labor are

adequate, including in Bali Province. it can be seen from the exchange rate of food crop

farmers (NTPP) in the Province of Bali which is always under 100 over the last seven years.

NTPP below 100 indicates more small farmers than the price received cost to be incurred for

the purchase of production inputs (BPS Bali, 2015). Figure 1 shows fluctuations NTPP in Bali

compared to NTPP Indonesia.

Figure 1. Farmers Exchange Rate Fluctuations Plant Food (NTPP) at the National Level and

Bali Province Level, Year 2008-2014 (Source: Central Bureau of Statistics, 2016)

The low income of farmers caused by some improper habits, particularly in grain storage.

Most farmers are directly sold throughout the harvest and purchase in the form of rice or

storage of part, while others are sold or consumed themselves entirely. Pattern selected the

storage of grain farmers, related to such things as the level of grain prices prevailing in the

market, post-harvest handling capabilities, and needs cash for everyday purposes including to

finance their farming.

Blow system is a system where farmers sell their rice crop was ready for harvest or will

harvest to the buyer that transactions carried out in the fields or other places. In a single stroke

systems, processes and extraction costs will be borne by buyer. In general, farmers in Bali to

do with the rice harvest slash system in order to reduce the cost of harvest. Grain producer

price survey in 2014 by the Province of Bali BPS noted that 82 percent of respondents

farmers harvesting system with swing, while 18 percent of the harvest itself. Hidayati (2014)

research results concluded that the blow is a mafia system for farmers that will be detrimental

and make farmers helpless. For example, when a middleman cut off part of the money has not

been paid when failed crops, but farmers still need a middleman as intermediaries to market

their rice crops, so farmers are very dependent on middlemen.

One of the sources, the low selling price of grain received by farmers is the long chain of

grain distribution channel. Therefore, to help farmers get a decent price needs to do a study of

the pattern of distribution and marketing of rice to look more closely at the functions of each

level of the grain trade. Marketing who generate high costs will have an impact not only

reduce surplus producers, but will also weigh on consumers. In food marketing, there are

many variations in the number of agents or the length of the distribution channel, from the

simple to the distribution channel is long and complex. Therefore, this paper is made to

expose the marketing of grain and rice, especially in the province of Bali, Indonesia, so that

governments can design policies to influence the marketing of grain and rice for the welfare

of farmers and consumers according to their ability.

1. Marketing Concept

The marketing system is an important part of the chain since manufactured goods to

consumers. The marketing system can also determine the efficiency of a market trade system

of goods, including food. Marketing is a comprehensive concept, whereas other terms such as

sales, trading and distribution is only one part or one activity in the overall marketing system.

So marketing is the whole of understanding about the sale, trade and distribution.

An essential element in the marketing activities are:

- Marketers, an organization of companies or individuals who have a specific purpose

for the organization as well as personal. Marketers can the manufacturer (usually for-

profit), organization (not necessarily profit-oriented), and government (oriented

towards the general welfare).

- Goods and services, i.e. various forms offered by producers to meet the needs and

desires of consumers. Goods can be concrete, not concrete (services) or combinations

thereof.

- Market, is a private consumer or enterprise organizations that have a need and desire

that manifests as the demand for goods or services.

- The process of exchange, is the activity of the two parties, each of which requires

something belonging to another party in an effort to meet the needs and desires of

each.

So marketing is a whole system of business activity indicated for planning, pricing, promoting

and distributing goods and services that can satisfy the needs of customers who existing and

potential buyers. Marketing needs much begin since before the goods are produced. The

decisions in marketing should be made to determine the product, market, price and promotion.

Marketing activities did not start upon completion of the production process, also does not

end when the sale is made (Stanton, in 2001).

Agricultural marketing is a part of marketing science in general, but can be considered as a

stand-alone discipline because it is based on the characteristics of agricultural products,

agricultural marketing subject and the object itself. Agricultural marketing was first run at the

time people can produce more than for their own needs. The transition from production for

consumption to production for exchange run very slowly. Hence the conception of the very

comprehensive agricultural marketing, Abot (1958) defines agricultural marketing is a series

of economic activity commodity agricultural products ranging from primary producer to the

final consumer. While Philip (1968) defines agricultural marketing as a commercial activity

which includes the flow of goods and services physically from production centers to

consumption centers, Breimeyer (1973) state agricultural marketing occurred after farm

(marketing post the farm) and production occurs on farms ( production on the farm).There are

still a lot of definitions and conceptions of the agricultural marketing but the core of it all is

the whole series of services performed in the transfer of agricultural products from the point

of first production to the point of final consumption.

The process of delivery of agricultural products from producers to consumers in accordance

with the specific properties require high marketing costs, and generally higher than the cost of

marketing other goods, the marketing of agricultural products is the marketing chain of the

most inefficient compared to distribution other economic goods (Mubyarto, 1999).

The marketing concept says that the key to achieving organizational goals consists of

determining the needs and wants of target markets and provide the expected satisfaction more

effectively and efficiently than competitors. In marketing there are six concepts that are the

basis for the implementation of marketing activities of an organization that is: the production

concept, product concept, the concept of sales, marketing concept, the concept of social

marketing, and global marketing concept.

Marketing study approach according to Kotler (2006) can be classified by five approaches,

namely: (1) functional approach; (2) institutional approach; (3) commodity approach; (4)

managerial approach; and (5) total system approach.

2. Distribution Concept

Distribution is one of the aspects of marketing (Kotler, 2006). Distribution is the distribution

activities that seek accelerate and facilitate the delivery of products and services from

producers to consumers, so its use as required, the type, quantity, price, place, and time. The

effective distribution and access will facilitate the flow of goods by consumers so that they

can easily obtain it as required. Producers and consumers have a spatial gap, time, value,

diversity and ownership of the product because of differences in purpose and perception of

each. With distribution is expected to overcome the gap between producers and consumers.

According to Kotler (2006), the process of distributing the commodity marketing activities

capable of:

- creating value-added products through marketing functions (marketing function),and

- streamlining the flow of marketing channels (marketing-channel flow) physical and

nonphysical.

The function which is run by the distribution activities will be able to create the usefulness of

the form (form utility), the usefulness of the place (place utility), use of time (time utility),

utility ownership (ownership utility).While the functional activity of distribution process can

be divided into three activities, namely the selection of activities, meetings (producers and

consumers), and the activities of the exchange (negotiation and transaction products).

Distribution channels have a very important role in the marketing process, given the

distribution of this product will be up or not in the hands of consumers. The longer the

distribution sequence that occurs, the more the additional fees charged on the products in

question, so the selling price of the product after to consumers will become more expensive as

well.

Materials and Methods

Food is a commodity that is vital and very strategic because it is the first basic requirement

needed by every human being, including in Indonesia. Therefore the food needs can’t be

postponed. While the food or agricultural commodities in general have special characteristics

because production is affected by seasonal factors. In consideration that the food problem has

specificity in terms of needs, production, and markets, the government is attempting to

participate in the marketing of food, particularly grain and rice.

It is interesting to examine how the development of the marketing system, distribution

channels, as well as the government's role in food marketing in line with the development of

the food market itself. This is interesting considering the natural food market will develop in

line with the shifting patterns of the economy increasingly characterized by the industry

pattern. When associated with the era of free trade and global markets as well as a shift in the

economy towards industry, it examines the system shifts the marketing and distribution

channels are highly relevant food markets in an effort to improve the efficiency of the market

in order to create and maintain a healthy food market mechanism. For this purpose, the

following research questions were formulated:

- How is the distribution channel of grain and rice in Bali?

- How is the marketing efficiency of grain and rice in Bali?

- How is the government's role in improving the efficiency of the marketing of grain

and rice?

Methods of data analysis in this research is descriptive statistics, to illustrate the secondary

data obtained in order to answer the problem in writing this paper. To analyze the efficiency

of marketing can be done with quantitative and qualitative analysis. Quantitative analysis of

the views from the marketing margin, the share of manufacturers and elasticity of price

transmission. Qualitative analysis is used to determine the structure of the market (the number

of buyers and sellers), the behavior of the market (by purchase, sale and payment), as well as

the market performance of marketing channels such as price, cost and volume of sales

(Pradika, et al., 2013).

Results and Discussion

1. Distribution Channels Grain and Rice in Bali Province

Efforts to improve the welfare of farmers through pricing policies and other market incentives

will be effective when farmers are directly related to the market so that they can catch their

incentives. Affiliated farmers to markets is important for the decisions of farmers in

determining the way farming. According to Ellis (1988), farmers in developing countries are

often an integral part of a competitive market for their piece of farming consumed results

(motif subsistence) and sales practices by traders who are less transparent, for example

through the blow system or other non-market mechanisms.

In a free market period, it turns the rice distribution pattern did not change significantly. The

study results Natawidjaja (2001) and Rusastra et al (2003) showed that the habits of farmers

to sell grain was in the blow or through traders still going on (Figure 2). Institutional expected

distribution more efficient in the period of the free market did not materialize. Grain and rice

marketing channels remain long as the period of uncontrolled market.

Figure 2.

Channel Commerce Administration of Grain and Rice from Farmers Up to Consumer

(Source: Natawidjaja, 2011)

Note: 1)

middleman who buys crops still standing in the field and who employs his own labor 2)

Bulog/Dolog is a government-owned ompany in Indonesia which deals with food

distribution and price control,

Fit Figure 2. it can be seen that in general there are three main channels of grain distribution,

namely through buyer, traders and cooperatives. Further grain trader distributed to shelters

(refinery/millers). After becoming the rice, then re-routed through three main channels,

namely the distributors, wholesalers/the main market/city, and Dulog/Bulog. Lastly rice is

distributed directly to consumers or through the store/kiosk retailers.

Furthermore, the research results Natawidjaja (2004) related to the dynamics of the pattern of

marketing grain and rice in Indonesia, noted that in the province of Bali, margin share the

average is approximately USD 44-68 of every USD 100 paid by consumers. When prices tend

to rise, margins tend to rise anyway around US $ 5-21 for each price increase of IDR100,

similarly when consumer prices were likely to fall, the margin dropped to a low of IDR14-33

every decline in the price of USD 100 in the consumer market.

2. Efficient Analysis Marketing

2.1 Quantitative Analysis

2.1.1 Analysis of Marketing Margin

Margin marketing can be used to see marketing efficiency, can also be used to see the huge

differences between producer and consumer prices. Or can also be used to look at the costs

incurred by the marketing agency when transferring goods from producer to such goods can

be accepted by consumers.

If in the marketing of agricultural products, there is a marketing agency that perform

marketing functions, the marketing margin can be written as follows:

Where:

mji = margin at the i level of marketing agency

Psi = The sale price at the i level marketing agency

Pbi = The purchase price at the i level marketing agency

Table 1 shows data marketing margin on the marketing of grain and rice in Bali Province in

the period 2008 - 2014 Table 1 referred when described (Figure 3.2) shows that the GKP and

HEB price disparity is widening year by year from year to year, except in the year 2013 to

2014 which experienced a slight decline.

Table 1

Price of Grain, Price of Rice and Price Disparity in Bali Province, Year 2008-2014

Year Price of Grain Price of Rice Disparities (Price of Rice - Price of Grain)

(IDR) (IDR) (IDR)

2008 2282.60 5419.46 3,136,86

2009 2539.65 5794.45 3254.80

2010 2932.36 7173.71 4241.35

2011 3328.36 8332.57 5004.21

2012 3658.37 9188.72 5530.35

2013 3756.44 9549.81 5793, 37

2014 3884.18 9445.98 5561.80

Source: Central Bureau of Statistic of Indonesia, 2015

Figure 3.

Disparity in Price GKP and HEB Bali Province 2008-2014

Source: Central Bureau of Statistics of Bali Province, 2015

Many phenomenon that the pace changes in the price of rice at the retail level is greater than

the rate of price changes at the farm level GKP. The market faced by all market participants

are actors not perfect or not competitive, that there is monopoly power and oligopoly in the

marketing system and marketing system that applies not efficient. When viewed from a

macroeconomic theory, the price of rice is too high it will adversely affect the economy of

Indonesia. The government always tries to regulate the price of rice at a certain level that is

beneficial to farmers and consumers, especially rice is one of the major commodity inflation

forming. The government is positioned in the food price dilemma, where consumers want a

low price of rice, but farmers want to reverse. In the conditions of this dilemma, the

Government is expected to take the rice price policy to accommodate the interests of rice

farmers and consumers. Suitability rice price policy will be visible when the price of rice is

considered a high level of rice farmers but low levels of consumers.

There is a widespread belief that farmers will be better off when it can produce products that

fetch higher prices in the retail market, but the results of the study (Minten et al.,2012)

showed that farmers do not benefit from higher commodity price growth at the retail level. It

shows that benefit farmers more determined in grain prices. One source of low selling prices

received by farmers is grain length grain distribution chain. Initial studies Mardianto, et al.

(2005) showed that the grain trade levels consisting of village-level traders, merchants district

level, the district level traders and wholesalers who will process the paddy into rice and sell it

to consumers.

Research Arifin et al. (2006) report that since the end of the reign of President Suharto in

1998, there was a disparity in the price of rice is very significant between rice farmers and

consumers. On June 1, 1998, Basic Price of Paddy (HDG) established by the Government of

Rp.1,000.00 per kilogram, while at the wholesale level a minimum amount of $ Rp1.850,00

per kilogram. Until now the problem of disparity between the price of rice continues and

becomes more complex (Arifin, et al.,2006).

2.1.2 Producers Share

Producers share is a comparison of prices at the producer level with prices at the consumer

level, and is often expressed as a percentage. Share analysis aims to determine the parts

producers in prices received by producers. If the share of producers are increasingly high, the

market is getting better performance from the producer side. The share of producers of

formulated as follows:

Description:

PS = Part rice commodity prices received by producers

Pf = commodity prices at the producer level

Pr = commodity prices at the consumer level

Table 2 presents the calculation of producers share analysis in Bali Province.

Table 2 shows that the distribution channel of grain and rice in Bali showed that the share of

farmers is still low at an average of 41, 00 percent. The market share in the distribution

channel shows the percentage of under 50 percent. This indicates that the weak bargaining

position of farmers in the face of the buyer, so that it can be said that the marketing of grain

and rice in Bali province is less efficient in the share of producers.

Table 2

Manufacturer Share Analysis of Grain and Rice in Province Bali Year 2008-2014

Year Price Level Producers Price Level Consumers Producers share

(IDR) (IDR) (%)

2008 2282.60 5419.46 42.11

2009 2539.65 5794.45 43.83

2010 2932.36 7173.71 40.88

2011 3328.36 8332.57 39.94

2012 3658.37 9188.72 39.81

2013 3756.44 9549.81 39.33

2014 3884, 18 9445.98 41.12

Average 3197.42 7843.53 41.00

Source: Central Bureau of Statistic of Indonesia, 2015

2.1.3 Elasticity of Price Transmission

Analysis of price transmission elasticity is used to determine the impact of changes in the

price of a product in one place/other level. Mathematically, the price transmission elasticity is

formulated as follows:

Price has a linear relationship, where Pf is a function of Pr, which is mathematically

formulated as:

From the above equation can be obtained:

Description:

Et = price transmission elasticity

δ = Differentiation or derivatives

pf = average prices at the producer level

Pr = average prices at the consumer level

a = constant or the point of intersection

b = regression coefficient

criteria of measurement used in the analysis of price transmission is (Hashim, 2012):

- If Et = 1, meaning the rate of change in consumer prices equal to the rate of change of

the level of producer prices. This means that the market faced by all players in the

trading system is perfectly competitive, and business administration system that

occurs is efficient.

- If Et < 1, meaning the rate of change in consumer prices is smaller than the rate of

change in producer prices. This situation means that the prevailing inefficient

marketing and market faced by actors competing trading system is not perfect, that

there is a monopsony or oligopoly power.

- If Et > 1, meaning the rate of change in consumer prices is greater than the rate of

change in producer prices. The market faced by all market participants is the

perpetrator is not perfect, that there is monopoly power and oligopoly in the marketing

system and marketing system that applies not efficient.

According to the results of processing the data in Table 2, showed that price transmission

elasticity value that describes the impact of changes in consumer prices to prices at the

producer level was 1.13. This value indicates that the rate of price changes at the retail level

of rice is greater than the rate of price changes at the farm level GKP. The market faced by all

market participants are actors not perfect or not competitive, that there is power monopolies

and oligopolies in the distribution system and distribution system applies not efficient.

2.2 Qualitative Analysis

2.2.1 Market Structure

Structure (structure) is an attribute that affects market competition among buyers and sellers

in the market. Some examples of market structure that is the number of marketing agencies,

product differentiation, and the conditions out of the market (USAID, 2008).

In general, according Figure 3.1 marketing agencies involved as an intermediary that is

buyers, traders, cooperatives, traders Shelter, Dolog/Bulog, Wholesalers, Traders Market

Master, and Merchant Retailers. Marketing is said to be efficient when created circumstances

in which the parties involved, manufacturers, marketing agencies and consumers to obtain

satisfaction with their marketing activities (Limbong and Panggabean, 1998).

Further related product differentiation refers to the various types of products (grain) produced

by growers. Grain is the output of farmers is considered homogeneous, though different

quality. The quality of rice can mean different types of rice for different consumers.

Farmers market structure approaches perfect competition, it is apparent from the number of

buyers (milling) as well as rice farmers can interact. Grain crop farmers are homogeneous.

Conditions of market entry barriers to exit from the side of farmers and buyers are relatively

low milling. Ease of farming and have made the effort milling grain market sales and

purchases is easy to enter new business actors. Information regarding pricing and product

markets easily obtained either from fellow farmers and of the buyer or milling. While other

actors facing an oligopoly market and Oligopsony (Ariyono, et al: 2013).

2.2.2 Market Conduct

Market behavior (market conduct) is a pattern of behavior of sellers / traders and other market

participants adopt to affect or adjust the buying and selling in the market place. This includes

practices and behaviors transaction pricing (USAID, 2008).

Examined the market behavior of the transactions practice and price formation. Grain markets

occur between farmers and between farmers and the mills or traders (middlemen). And the

price of the transaction form determined by the quality of grain offered. Often the reason for

pressing water content so that the price received by farmers under the government purchase

price. Location of the transaction can occur in the field, at home, in the grinding and

elsewhere. From Paddy Producer Price Survey 2014 by BPS Bali, farmers who were

respondents in Bali according to Figure 3.4, tend to make transactions in the field at 91, 46

percent, followed by grinding as much as 6.97 percent and 1.24 percent at home , While

farmers who make transactions in the village hall, hall Subak and other places only 0.34

percent (BPS Bali, 2015).

2.2.3 Market Performance

Market Performance (Market Performance) refers to the extent to which markets produce

outcomes that are considered good or appropriate by the community. Market performance

shows how well the market can meet personal goals or social / specific communities. This

includes channel marketing, pricing, fees, and sales volume (USAID, 2008).

Supratna (2005) states that there are two distribution lines of rice from farmers to consumers

of rice, the first farmers to sell grain to traders as an extension of their partnership traders /

wholesalers. Of traders, grain stored, grouped by type varieties, and then distributed by the

merchant to merchant refinery joint venture. From merchant refinery, grain began to undergo

treatment includes drying, milling and grading. The rice that has been packaged and labeled

subsequently distributed to wholesalers. From wholesalers traders, rice distributed to retailers

for sale to consumers. Distribution channels both said that farmers sell grain to traders is the

extension mill owners of the village. In the village mill, grain undergo a process of drying,

milling and grading of rice. Furthermore, the rice is packed with no labeled and distributed to

retailers for sale to consumers of rice.

Related to the cost structure / business expenses rice crops in 2014 in Bali is approximately

Rp.12 million. Generally in Indonesia in 2014, the total cost per cropping season for one

hectare of paddy rice harvested area of Rp.12,7 million. Components of the cost of production

enterprises of the largest rice crops are the wages of workers and agricultural services, which

reached 48.32 percent of the total aged or Rp. 6.1 million. In addition, the production cost is

also relatively large expenditures for the lease of land and fertilizer, respectively by 29.86

percent (USD 3.8 million) and 10.40 percent (USD 1.3 million) of the total cost ( Figure 3.5).

In subsequent marketing process, activity of transportation, storage and processing in general

are three main functions of marketing in addition to the function of financing.

3. Factors Possible Influence in Development Marketing Systems Rice

Market mechanism that failed to create the conditions of full employment in the flow of

Keynesian economics, has provided one of the reasons for the instruments of government

intervention in the market mechanism. Both developed and developing countries generally

use government intervention to influence the market with a variety of shapes and targets. In

the advanced capitalist countries, the dominant role of government arises because according

to the need to rebuild European countries who are victims of World War II. The role of

government is also expected as fine-tuning the economy by coordinating investments and

savings in order to achieve conditions, full-employment the expansion of the social welfare

system, as well as stabilization task.

Meanwhile, for countries that are developing, government investment is usually to protect

nascent industries (infant industry) as an import substitution strategy, among others in the

form of protection and subsidies. The role of government in the market mechanism is also

expected as a guard macro balance and providers of services and public goods as well as

coordination in seeking the synergism allocation of economic resources so as to form an

effective transfer of resources to transform potential into effective power source (Indrawati,

1997).

In the food market, the role of government sometimes deliberately done to protect the

interests of producers and consumers, ensuring the security and stability or improve food

security and promote economic growth. But government involvement in food markets can

also be caused by changes in external factors, so the government sees the need to engage in

order to adjustment changes.

In line with the state of the economy is growing, food marketing system that occurs today has

undergone a shift. Food marketing system condition that occurs today reflects a change that

needs to be responded to adjustments continuously government's role in order to ensure the

permanent creation of efficient food market.

To anticipate and adapt to the changed conditions, there are a variety of options associated

with the government's role in the marketing system with the con-sequences on choices made.

But at least the option is obviously aiming to improve the efficiency of the market and is also

able to accommodate advances in marketing system shifts occur. In this case, to improve

marketing efficiency, the role of government that stands out is the function of "coaching" in

addition to regulatory functions remain attached. In the function of management of

government's role, among others, can be done in the field of research and development field

orientation in terms of storage, management training, marketing, technology, storage,

processing and Iain, Iain which should be done in an integrated manner across sectors. But in

some stage the government can act as a counterweight in marketing to prevent the emergence

of monopolies and oligopolies.

In this era of decentralization, which should be avoided is the emergence of policies that

impose various levies and charges on traffic flows of agricultural products that could lead to

bottlenecks and inefficiencies. Should be considered for the establishment of a national food

reserve system is a network of inter-regional food stocks (and between seasons) that can

easily be mobilized for the operation of the market at a time of food shortages condition

somewhere. It is better than importing, given by the calculation of the availability of the

national rice per year, is still available amount sufficient food stocks to be traded in the

domestic market.

With the separation of farmers from the market, all market incentives and welfare of farmers'

efforts are done through pricing policy would not be effective because farmers perceived to be

more enjoyed by the perpetrators of the trade system, especially the merchants. To improve

farmers' welfare should be done through policy mechanisms that can be enjoyed immediately

to farmers and their families without intervening in the market mechanism.

Food marketing changes according to Kim (1986) also occur dynamically. Pressure on

traditional marketing system brings about a change to conform with the marketing system is

needed in the development of a modern economy. Factors that may influence the development

of more complex marketing system includes the increasing commercialization of products, the

adoption of science and technology are increasingly high, increasing specialization of

companies and labor, geographic separation of production and consumption, increasing

population and urbanization, changing habits eating and purchasing power, as well as changes

in consumer mobility, and the role of government. Innovation is important in marketing,

especially in developed countries and has been able to establish new methods and

organizational structures in production and other economic activities, including marketing.

Among the new methods of marketing that has been done in developed countries, there are

three things that really stood out in innovations that help improve the efficiency of the overall

marketing, namely: use of standard containers widely, widespread adoption of self-service

method at the retail level, and the use of computers extensively. Kim (1986) noted that a

fundamental difference in the marketing system among developed countries with countries

emerging is in the case where the supply system in agriculture, labor costs, the level of

consumer income, level of urbanization, cultural background including eating habits etc.

Conclusion

The distribution channel in the marketing of grain and rice in Bali is almost the same with

other regions in Indonesia that developed during the period of the free market. Distribution

channels is still long, and institutional expected to be more efficient marketing has yet to

happen.

Viewed from the side quantitatively and qualitatively, the marketing efficiency of grain and

rice in Bali province has not been efficient. A quantitative approach used is through the

analysis of the marketing margin, the share of manufacturers and elasticity of price

transmission. While the qualitative approach to describe the efficiency of the market by the

method of SCP (Structure-Conduct-Performance).

The government's role in improving the efficiency of marketing grain and rice that the

regulatory function to determine the policies, the function of management through research

and training, as well as a counterweight in marketing to prevent the emergence of monopolies

and oligopolies, while protecting the interests of producers and consumers.

Based on the study results obtained, presented some suggestions are expected to be used as

input and improvements as follows: (1) The government needs to draw up an institution that

can direct that grain and rice distribution channel becomes shorter; (2) It should be examined

more in depth about the causes of inefficiencies in the marketing system of grain and rice in

Bali, so it can be designed improvement strategies targeted marketing and appropriate; (3)

The role of the government, including one of the factors that influence the marketing of grain

and rice. In the function of supporting the government's role should be optimized to provide

appropriate guidance to the farmers' needs both of a technical nature to improve farm

productivity, as well as those related managerial berdifat costings, pricing, and access to

information.

Corresponding author:

Dr. Ni Nyoman Reni Suasih

Development Department of Economics, Faculty of Economic and Business,

Udayana University, PB Jalan Sudirman, Denpasar, Bali, Indonedia

Phone: +6282144183939, e-mail: reni_kenanga@yahoo.com

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