An analysis of marketing performance of tambak commodities in West Nusa Tenggara Province, Indonesia

Abstract

Recently the Indonesian Government has become aware of the importance of the brackish water pond (tambak) culture to stabilize income, employment opportunity, and nutritional requirements in rural areas. Among Asian countries, Indonesia has the greatest potential area of tambaks that stretch throughout her coastal zones, but the yields are far below the yields in China, India, Taiwan and the Philippines. The main inhibitive determinants are poor techniques of production and poor performance of the present marketing system. This study examines the marketing performance of the brackish-water pond (BWP) commodity (fry, milkfish and prawn), with the province of WNT as a case study. Due to the lack of time series records and previous empirical studies, this present study only concentrates on a short run phenomenon of the marketing system. The Gross Marketing Margins (GMM) concept was used to examine the hypothesis that middlemen were exploitive agents in the marketing process of tambak commodity. It was decided to disaggregate final prices and 'GMM' into two main groups of marketing charges (profits) and marketing costs (factors revenue). The 'GMM' is subdivided further according to marketing stages and tasks. The results showed that among marketing participants, farmers or growers are the group who receive at least 50% of the final prices, irrespective of market levels (export, districts, and village) and kinds of commodity (fry, milkfish and prawn). The tendency showed that (a) as the distance from farm to final market increased , farmers' share decreased, and (b) milkfish and prawn farmers received less than fry farmers. The analysis of cost elements, on the other hand concluded that it is hard to identify the presence of an operational inefficiency in the present system. But considering the magnitude of percentages of risks, sales tax, and marketing facility fees as indicators this study discovered that (a) within similar flows the risks for fry are greater than for milkfish, while cost of transporting the latter is higher than of the former, (b) a possible way is opened for reducing this element if appropriate maintenance and storage facilities for respective commodities are provided, and (c) joining producers and consumers or buyers centers with a better road network may also reduce risks. Government intervention is necessary for the establishment of such appropriate infrastructure facilities. In terms of the average of marketing charge percentages or rates of returns on investment (ROI) this study also found that (a) fry traders at all market levels receive more profits than fish and prawn traders, and (b) after deducting depreciation (at alternatives of 5% and 10%) and opportunity cost of capital (at an assumed rate of 18%), the results showed that there was some 'excess* revenue in case of fry marketing, particularly in the export market to East Java, and in the intra-district market in Sumbawa. In regard to any reduction in marketing costs and fostering a decrease in the 'excess' profits, some mechanisms are finally discussed. Data improvement and further detailed study are required for more definitive answers to the problems raised by this study.