Identifying the Sugarcane Trading System in Indonesia: An Institutional Economics Perspective

This study identifies the most efficient sugarcane trading systems in Indonesia on the basis of trading transaction costs. The design of this study is a qualitative approach by interviewing 142 sugarcane farmers. The data was analyzed using content analysis. The result indicates three sugarcane trading systems in Indonesia. First, the farmers sell the sugarcane directly to the mills. Second, farmers sell sugarcane to wholesalers. Third, farmers sell sugarcane to sugarcane traders (cash sugarcane). Thus, this study has identified that the second trading system is the most efficient sugarcane trading technique compared to the first and second systems.