Abstract

This study identified the impact of the emerging cassava processors to the cassava production in Sukadana, East Lampung, Lampung, Indonesia. 80 cassava farmers in Sukadana were surveyed to know their relationships with processors, production cost structures and cultivation practices. Regression analysis showed that harvesting age was a critical factor to determine the cassava yield and price in the study area. Three types of farmers were observed in the study area, namely, farmers joining collaboration with a foreign food company, collaboration with local processors and farmers who have no collaborations with processors. The technical support provided by the emerging processing companies which tried to break into the current oligopsonistic cassava market had a positive impact to optimize the plant management. The increasing demand for cassava induced by biofuel production would attract more companies to the processing business and the tightening competition among the companies would motivate the companies’ investment in supporting activities for farmers. This in return would contribute to the farmers’ welfare through improved profit of cassava production. These findings can be used as practical information for formulating effective cassava marketing policies in the study area.

Key words: Biofuel, farmers’ welfare, oligopsonistic market.