THE EFFECT OF CORN PRODUCTION AND PRICE ON THE FARMERS' TERMS OF TRADE IN SIX PROVINCES OF SULAWESI ISLAND
Abstract
This study aims to analyze the effect of corn production and corn price on the Farmers' Terms of Trade (FTT), both partially and simultaneously, in six provinces of Sulawesi Island during the 2020–2024 period, namely Gorontalo, North Sulawesi, Central Sulawesi, West Sulawesi, South Sulawesi, and Southeast Sulawesi. This research uses a quantitative approach with annual secondary data sourced from the Central Bureau of Statistics (BPS), compiled as panel data (30 observations). Data were analyzed using panel data regression in E-Views 10, including model selection through the Chow Test, Hausman Test, and Lagrange Multiplier Test, as well as hypothesis testing through the t-test, F-test, and coefficient of determination (R²). The model selection results indicate that the Random Effect Model (REM) is the most appropriate estimation model. The estimation results show that, partially, corn production has a negative and significant effect on FTT, while corn price has a positive and significant effect on FTT. Simultaneously, corn production and price have a significant effect on FTT, with an R-squared value of 0.2288 (22.88%). These findings indicate that an increase in corn production does not automatically improve farmers' welfare as reflected by FTT, whereas an increase in corn price tends to have a positive impact on farmers' welfare. Therefore, improving the welfare of corn farmers requires an approach that is not solely oriented toward increasing production volume, but also toward price stabilization, production cost efficiency, strengthening market access, and strengthening farmers' bargaining position.
Monthly Statistics (Last 12 Months)
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