The Interest of Blitar Sugarcane Farmers Continues to Increase, Here's Why

Rejoso Manis Indo, 03 October 2022 | Penulis : Muhamad Devi Riswandi
The Interest of Blitar Sugarcane Farmers Continues to Increase, Here's Why
The number of farmers who send sugar cane to the factory increases from year to year. From 300 farmers when it was first milled in 2019, to 1,200 people in 2022.
Before the Rejoso Manis Indo Sugar Factory (RMI), sugarcane was not attractive to many farmers. Low selling prices plus production costs that continue to rise are the causes. They feel they are not getting the benefits because the results are not worth their efforts. It is not surprising that many farmers, including in Blitar, “retired” their sugarcane, and replaced the crops on their land with sengon trees.

However, since PG RMI has been operating, they have demolished the sengon tree. The land is replanted with sugar cane. They are excited again because of the sweet price offered by RMI.

PG RMI also got its blessing. The number of farmers who send sugar cane to the factory increases from year to year. When milling began in 2019, the number of sugarcane farmers was 300 people. In the 2020 milling season, there were 893 people. Then it increases again to 998 people in 2021 and to 1,200 people in 2022.

Before RMI Operates

Before there was PG RMI, farmers in Blitar and its surroundings could sell their sugar cane at the lowest price of Rp. 40 thousand/quintal or Rp. 400 thousand/ton. Meanwhile, the highest price is Rp. 60 thousand/quintal or Rp. 600 thousand/ton.

One cane truck contains an average of 8 tons, so that from the sale of sugarcane from one truck, farmers get between Rp. 3.2 million (Rp. 400 thousand x 8 tons) to Rp. 4.8 million (Rp. 600 thousand x 8 tons).

If it is related to land area, assuming that each hectare can produce 100 tons of sugar cane, then the farmer's selling price of sugar cane with the lowest price (Rp 400 thousand/ton) per hectare is Rp 40 million. If the farmer manages to sell at the highest price (Rp 600 rb/ton), he gets 60 million per hectare. This is gross income.

What is the net income? In simple terms, we can calculate the net income (PB) of sugarcane farmers per hectare by subtracting the selling price (HJ) of sugarcane with production costs (BP) per hectare and transportation costs (BA) per hectare. Let's just write the formula: PB = HJ-BP-BA.

Before we calculate PB per hectare with this formula, we need to first know BP and BA per hectare. BP per hectare ranges from Rp 10 million to Rp 15 million (we just use Rp 15 million). Meanwhile, BA per hectare is around Rp. 5 million.

For HJ Rp 40 million/hectare (lowest price), then PB = HJ-BP-BA = Rp 40 million - Rp 15 million - 5 million = Rp 20 million.

For HJ Rp 60 million/hectare (highest price), then PB = HJ-BP-BA = Rp 60 million - Rp 15 million - 5 million = Rp 40 million.

This amount does not mean much to farmers, considering the time from planting to harvesting (cutting) sugar cane which reaches 1 year (12 months) and the area of ​​land used. We assume that farmers' productivity reaches 100 tons of sugarcane per hectare and can sell their sugarcane at the highest price (Rp 60 million per hectare). So the maximum net income is IDR 40 million per hectare per year. If this number is divided by 12 months, then the net income of farmers per hectare per month is not more than Rp. 3.3 million.

Since RMI Operates

Since starting the mill in 2019, PG RMI has applied reasonable prices to buy farmers' sugarcane. The lowest price can reach Rp 65 thousand per quintal or Rp 650 thousand per ton. This means, in one delivery with a truck loaded with 8 tons, the income from selling sugar cane to RMI is at least Rp 5.2 million (Rp 650 thousand x 8 tons).

In terms of land area, farmers who can maximize their cultivation will get 100 tons to 110 tons of sugarcane per hectare. We just use 100 tons per hectare, to facilitate the calculation. With that benchmark, the lowest selling price of sugar cane to PG RMI could reach Rp 65 million per hectare.

What is the net income per hectare? Let's calculate with the formula PB = HJ-BP-BA.

We use HJ data of Rp. 65 million, BP of Rp. 15 million, and BA of Rp. 5 million. Then PB = HJ-BP-BA = IDR 65 million - IDR 15 million - 5 million = IDR 45 million.

This Rp 45 million is the minimum net income per hectare (with the calculation of the lowest selling price) at PG RMI. The difference is quite significant compared to the lowest net income of farmers before the RMI (Rp 25 million per hectare).

Incentives and Convenience

It is not only reasonable prices that have made sugarcane farmers excited again since PG RMI started operating. Several PG RMI programs for farmers have also attracted attention. One of them is Sweet Cane, a program that provides incentives in the form of higher prices for farmers with good sugar cane quality, namely those with a minimum brix value of 19.

The facilities provided by PG RMI also inject more enthusiasm into the farmers. For example, the direct access of sugarcane farmers to PG RMI. This access can be owned by all farmers, including small farmers whose land is not large. Only half a hectare of land, for example, can be registered, so that farmers can send sugar cane themselves to PG RMI, not having to entrust their sugar cane to large farmers with larger lands.

Registration is also not difficult. You only need your KK, KTP, bank account number, and fill out a contract form. After that, the officer will conduct a survey of the registered land, among others, to determinebar and measure land area. After all the data is verified, the farmer will get a Farmer Card, complete with the barcode.

The next convenience, the sugarcane truck driver just goes to the nearest monitoring post to get an entrance ticket to PG RMI. These posts are spread out at many strategic points which are usually passed by sugarcane trucks so they are easy to reach.

Arriving at the monitoring post, the driver handed the Farmer's Card to the officer. Then the officer scanned the barcode listed on the ID card. Data related to sugarcane brought by the driver emerged: the name of the farmer, the origin of the sugar cane, and so on. After checking the sugarcane brix and entering the truck data and driver's name, the officer prints a document (commonly called SP) as an introduction to PG RMI.

Arriving at the factory, the ticket will be checked by the officer, the sugar cane is checked again for brix and digitally weighed, then the truck goes to the tipper. When you get there, the driver just has to wait, because the sugar cane shedding process is completely done with a tipper that is run by a machine. After the cane shedding, the driver will be given a proof of weighing to be given to the sugarcane farmer/owner.

The convenience that is no less interesting is the speed of payment. Sugarcane farmers/owners do not have to wait long to get the money they sell. Today the sugar cane is deposited into PG RMI, the day after tomorrow the farmers can get the money, because the officers only need 1 day to process the farmers' documents.

Farmers also don't have to worry about having their money taken away by naughty drivers. This is because payments by PG RMI are not made in cash or given to sugar cane carriers. PG RMI transfers the money directly to the farmer's account.*