The Impacts Contract Farming on Cultivation and Postharvest Practices on Red Chili Farm in Magelang District, Indonesia

Contract farming refers is to carry out the agreement between the buyer and the farmer to reduce risk for both parties. Red chili is rotten, damaged, and has a large shrinkage, causing production, quality and price risks. The study provide an empirical analysis of the impact of contract farming on chili cultivation and postharvest practice. The field survey was conducted in Magelang District as the one of the production centers of red chilies in West Java. Data collected from 40 farmers for contract and 45 farmers for noncontract. The results of the study indicated that the cultivation and post-harvest practices on contract farmers are better in quality, as well as in quantity compared to non-contract farmers. In contract farming, cultivation and post-harvest practices done by farmers are controlled by growers as representatives of the company. Tight control over the products produced by farmers generates not only for the better quality, but also the increase chili farm productivity. Contract farming is recommended to apply other agricultural commodities, specially for high risk commodity which has wid price fluctuation, high quality variation, and susceptible to climate changes