Impact of Increasing Input and Output Prices on Chili Production and Farmer Income in Banten Province

Abstract

In 2019, chili production in Banten province amounted to 12,122.9 tons with a harvest area of 1,395 ha or productivity of 8.7 tons/ha. The objectives of this study are: 1) Analyzing the factors affecting the cultivated land area and chili production in Banten Province, 2) Analyzing the impact of increasing input and output prices on chili production in Banten Province. This study method used a survey method with 80 respondents. The analysis method uses the Simultaneous Equation Model. The results of the study were 1) The factors that significantly influence the cultivated land area of Rainy Season (RS) 2015/2016 were the number of: manure, solid organic fertilizers, other fertilizers, solid leaf fertilizers, and the total land area. The factors that significantly influence chili production in Banten Province are the number of: KCL fertilizer, liquid leaf fertilizer, and liquid growth stimulant. 2) From the policy simulation results, it is known that an increase in chili prices by 25%, Urea fertilizer by 25%, and NPK by 25% simultaneously will reduce production by 2.8% and chili farming income by 16.2%, but increase the area land 5.8% and farmer household income 0.06%. The government needs to stabilize the chili price and maintain the subsidized fertilizer price.