SUPPLY RESPONSE ANALYSIS OF PADDY IN KEDIRI : MANAGERIAL IMPLICATIONS

Research of farmer’s response analysis to price is important to increase paddy production in Kediri. Farmers are conducted as the object of the research because they are the decision maker on all of farming activities. This study is aimed to know the effect of harvest area response, productivity response, supply response paddy, and managerial implications in Kediri. The analysis method used the Nerlove approach through harvest area response and productivity response. Data were collected annually from 1992 to 2015. The result showed that harvest area in previous year was the significant factor to the harvest area. Grain price, fertilizer price index, rainfall, harvest area in previous 2 years and 3 years had no significant effect. Factors which had significant impact for the productivity were grain price and productivity in the previous year, but fertilizer price index, harvest area, and rainfall had no significant effect. Paddy supply-elasticity in short term and long term was inelastic so that supply paddy was unresponsive on grain price changing. Managerial implication formulation consists of procedural implications and policy implications. Procedural implications included the use of a transplanter, jajar legowo system, use of fertilizer in 6 right-ways completed with a demonstration plot. The policy implication is was composed by price and non-price policies. Price policies were showed by costs of good sold which was supported by coopertaion between farmers and BULOG and the use of combine harvester. Non-price policies were embodied with the increasing of cropping index and wetland transformation into settlements.


INTRODUCTION
Food is the most basic requirements for human resources of a nation.Food security requiresavailability of food in sufficient quantity and quality, distribution ways in affordable prices and food safety.
Food safety means they are safe to be consumed for people to support their daily activities.(Purwantini, et al., 2002).
East Java is one of the cetral of rice productions and contribute for national spare.East Java is able to supply more than 17 percent of national rice and provides rice for 15 others provinces through Bulog (Deptan Jatim, 2014).In order to strengthen food security towards national food selfsufficiency, the government of East Java province focuses on excalation production of staple food crops.One of them is paddy.
Kediri is the one of rice crops, especially paddy in Jawa Timur.In the other hand, Kediri is supported not only by the width of the wetland but also the large of population which are relied on agriculture for livelihood (BPS, 2015).The problems are fluctuation of productivityand declining of land area harvested from 2010 until 2013.
The rapid growth of the population of Kediri demands the availability of rice on a local scale.Kediri government should achieve food security and food self-sufficiency.One way to make it happened is to make agriculture on the top priority in development plan.Food security can be done by some programs such as the intensification of seeds, balanced fertilization, pest and disease control, and utilizing marginal land.
The problem of this research were: 1) the factors that affect in response harvest area; 2) factors that affect the response of productivity; 3) Paddy supply-elasticity in Kediri; 4) To describe the magerial impication of supply response result.
Then the study was conducted in order to: 1) determine the factors that affect the response harvest area and productivity; 2) determine the elasticity of supply of paddy in Kediri, both short term or long term; 3) Determine magerial implication of supply response.

METHODS
The basic method which was used in this research was quantitative (statistic descriptive analysis and statistic inferential analysis) and qualitative.Qualitative method is a research methode based on positivisme, which is used to describe a natural object (Sugiyono, 2014).In this research, the method is applied to know manajerial implication from paddy supply response.Method for determining the location was purposive method, that was Kediri.
The data used in this research was secondary data.Data were collected annually from 1992 to 2015.To guess the harvest area response and productivity response, the resarche used the grain price, fertilizer price index, harvest area, productivity, and rainfall.All of data related to rupiah were deflated by

Harvest Area Response
Partial adjustment models for harvest area response in this study as follows: To analyze the supply elasticity of short-term and long-term used the

To know managerial implication
To find the managerial implication,   The price index of fertilizer had no significant effect on the harvest area.

RESULTS AND DISCUSSION
Subsidized fertilizer urea is a major fertilizer in rice cultivation.In real condition the increase or decrease in fertilizer prices will not make farmers reduce or increase acreage.In the research area, rice planting season has been scheduled so when prices of fertilizer decrease, farmers can not add acreage because of limited land.This also happens with rainfall does not affect the harvest area.Increases or decreases in rainfall does not make farmers increase or decrease the acreage because of limited land.
The harvest area in the previous 2 years had no significant effect on the harvest area.
It showed harvest area in the previous 2 years did not increase harvest area.The harvest area in the previous 3 years had no significant effect on the harvest area.

b. Productivity Reponse
The results of the analysis of the factors that affected the productivity response were presented in Table 3.
The test results F, R2, and the mean of the regression model were shown in table 3. The value of F arithmetic amounted to Factors that significantly affected productivity was the grain price, harvest area and productivity in the previous year.The price of grain was statistically significant effect on the productivity with marked positive and regression coefficient 0.037, significant at 5% error level.This value indicated the short-term elasticity means that if the grain prices increase 1%, the productivity current year will increase by 0.037%.In the long term elasticity was 0.0748, if the grain prices increase 1% the productivity increased by 0,0748%.In the short term and long termprice of grain inelastic, that means the change in productivity greater than the real grain prices.
Nevertheles the increase grain prices made farmers more intensive to manage rice crops in fields.
Productivity in the previous year affectedstatistically significant with a positive regression coefficient of 0.50in 1% error level.It showed every 1% productivity in the previous year could increase productivity 0.50% in the short term.In the long term each 1% of productivity in the previous year would increase 1,009% productivity (Table 4).Increased productivity in the previous year made farmers more intensive to improve the productivity of rice.
Factors that had no significant effect werefertilizer price index, rainfall and harvest area.Fertilizer price index did not significantly affect to the productivity and negative market.
The increase in fertilizer price index did not reduce the productivity of rice.It showed Table 4.
that farmers would continue to produce rice as possible as the increasing or decreasing in fertilizer prices.For farmers, fertilizer was the most important requirement of rice so that the price increase caused nothing.Rainfall was also not significant effect and positive marked.
It showed that increasing rainfall did not increasing productivity.Water requirements for rice cultivation in the study area was filled by irrigation, mostly taken from the Brantas River .When rainfall is low, farmers will use the irrigation so that the decline in rainfall did not affect the productivity.Harvest area statistically had no significant effect on the productivity of rice.According to Kepala Dinas Pertanian Kediri, condition does not occur in this research because extensification can only be done in marginal areas and needs some adapatation techniques.
c. Supply Elasticity Supply elasticity results were shown in Table 5, which included elasticity area, productivity, and supply.Research conducted by Leo (2000), the elasticity of harvest area and productivity response of the rice price in Java was also inelastic both short term and long term.
Productivity elasticity to the prices was greater than the elasticity harvest area to the prices, in the short term and long term.It showed that the contribution of increased production due to increased productivity was greater than the increase in harvest area.Increased productivity is done with the use of improved seed that has a high yield.
Elasticity productivity to the harvest area was elastic, 4.72 in the short term and 10.04 in the long term (Table 5).Table 5 showed that the increase in the harvest area Besides that, Firdaus (2008) mentioned that agricultural commodities was seasonal and dependent on nature.
Seasonal nature of agricultural commodities made farmers less responsive to the price.
The higher prices raisesafter the harvest time.Kediri planting pattern is paddy at the first season and followed by other crops.-Limited area to be rented.
-Housing replacement 28,5% 100% 2. Grain price -The price did not give some effect to change the kind of plant.
-The price gave no effect in term of the wide o planting area.

Fertilizer price
The fluctuation of fertilizer price did not affect farmers to change their plant and also give no effect in the width of farming area.

100%
So, the price-response of paddy happened after the other crops harvested.

Managerial implication
Mnagerial implicationis divide into two terms : procedural implication and policy implication.Procedural implication relates to the way and procedur in increasing the rice production.Policy implication is the right policy to motivate farmers in increasing production result.
Table 6 showed the result of indepth interview.
a. Implikasi Prosedural R e s p o n d e n t s s t a t e d t h a t extensification manner by increasing farming area was imposible (Table 6).
Respondents said that there were so many farm area which was repalced into the housing area.Extensification could be done by renting the farm area but there wre a few chance to rent because the land owner was less than those who wante to rent.

Intensification process was used by
getting the wider farm to increase produtivity.
Jajar legowo and the using of transplanter were used in Kediri to support intensification system.In the other case, some farmers did not follow thistechnology because they assumed that their conventional way of farming was beneficially enough.Some demotration plots were build by using transplanter and jajar legowo system and the harvest index significantly higher.Others things whih was important to do was recording the production befire The jajar legowo system was compared with tanam tegel system-the conventional system one.This note was used in evaluatin meeting in farmers organization.
The fertilizer price index did not significantly give effect in widht area and productivity.So the additional subsidized fertilizer was no need to do.To make sure that the fertilizer was proper enough, the soil test should be taken to konow that the Kata Kunci : elastisitas, implikasi manajerial, harga, padi, respon penawaran obtained by farmers based on estimation of future periods and their experiences in the past.When a commodities price of agriculture increase at a certain time, the increase is not followed automatically by productivity and areal increasing.It is beacuse resource allocation decisions have been set at the previous time.The farmers' responses occurred after the time difference (lag) as the impact of changes in input prices, output, and government policies.If the price is estimated higher, farmers will continue their ways and change their ways at the next period by altering the composition of the resource, so that in the short term price elasticity is inelastic.Improvement and sustainability of rice production is largely determined by the farmer's participation in the government's programs.Efforts to increase production will not be achieved if farmers do not give any supports for the programs.In this condition, farmers is the critical success factos of agricultural production improvement program so goverment needs to run incentif systems for those who increase production sucessfully.Farmer decisions in allocating resources, whether land, labor, and funds for a variety of land-use options is determined by the response of farmers to price, government policies and other factors.Supply response research determines the success of the price increase in production in Kediri, because in the end farmers who will make decisions on production and business activities.
the consumer price index by using the base year 2007.Deflation was needed to eliminate external factors, such as inflation.The data were taken from Badan Pusat Statistik Kediri, Dinas Pertanian Kediri, and BULOG Kediri.Both primary data and indepth interview were used in this research in which agriculture departement, rice miller, and farmers as the subject of research.To determine the factors that affect the response, partial model Nerlovedeveloped by Marc Nerlove was adapted.The rearch used harvest area response and productivity response approach and regression analysis.
arranged in a logic way so that the conclusion could be showed.c.Conclusion was stated to find the data interpretation.
of 100 % would increase productivity by 472 % in the short term and 100.4 % in the long term.Although it was elastic, increasing area was difficult because the condition of land in the study area of the narrow and converted into a settlement.Table 5 showed that Paddy supply elasticity in Kediri was inelastic, 0.073 in the short term and 0,298 inthe long term.It can be argued that the change of supply not responsive to changes in the price of grain.If the price increase 100%, the supply would increase by 6.6% in the short term and 19.9% in the long term .Paddy supply elasticity was less responsive because farmers could not immediately adjust their production activities in response to price increasing because farmers will adjust price forecasts in the future in the form of the difference between the estimated proportion with the reality.Gujarati (2005) , mentioned three main reasons underlying it, namely 1) psychological; 2) technical; and 3) institutional.Psychologically farmers were often reluctant to make changes because it is generally fixed on the old traditions.Technically, the agricultural production process needs lag time in between planting and harvesting.Similarly, the introduction of new production techniques requires time to be adopted by farmers and growers adapt new production techniques before it could eventually increase the production.Institutional change could not happened because there were rules, such as the existence of a contractual agreement binding on production time.Farmers in Kediri sell their grain in the middleman with the prices below the floor price set by goverment.Though BULOG provides grain prices above the base price, but farmers prefer to sell to middlemen because farmers get cash immediately without delay.BULOG uptakes in minimal quantity .Based onRice Productivity Index coefficient, BULOG only absorbs below 70% of global production produced by Farmer (Citra Indonesia,2015).
use of fertilizer was in a right kind, in a right way, in a right time, and also in a right matter.The demonstartion plot was neede to show that the right use of fertilizer colud lead us into the high productivity.b.Policy implication The main objectives of Policy implication was to make the productivity higher and harvest area getting wider.The policy impplied in price and non price implication.Rice harvest index was the solution of non-price policy.Harvest index was the average of harvesting produced in a year.Farmers planted rice in twice or fifth times in a year because water irigation was served properly.Departement of agriculture and farmers organization made a regulation in planting pattern to find the certain harvest index.The location which was choosen as the demontration plot to get a higher harvest index were: (a) The planting time was more than 12 months and equally with Managerial Implication

Table 1 .
Results of regression test harvest area

Table 3 .
Result of regression test of productivity Source: Secondary data,2016 (calculated)