Factors Affecting the Price of Palm Oil Fresh Fruit Bunches

Oct 13, 2025 by magicalceylontours.com 53 views

Analysis of Factors Affecting the Prices of Fresh Palm Oil Fruit Bunches received by Farmers (Case Study: Air Hitam Village, Lima Puluh District, Batubara Regency)

Introduction

The palm oil industry is one of the largest industries in Indonesia, with a significant impact on the country's economy. The industry provides employment opportunities and income for millions of people, particularly in rural areas. However, the prices of fresh palm oil fruit bunches (FFB) received by farmers in Air Hitam Village, Lima Puluh District, Batubara Regency, have been a subject of concern. The prices set by the North Sumatra Province price determination team and the prices given by the Palm Oil Mill around the village have shown a significant difference. This study aims to reveal the factors that affect the price of FFB received by farmers in Air Hitam Village.

Methodology

This study uses descriptive analysis methods and multiple linear regression with the help of SPSS applications. The data used are secondary data from the Central Statistics Agency (BPS) and the Air Hitam Village Government, as well as primary data in the form of survey results and interviews with oil palm farmers. The study focuses on four main factors that affect the price of oil palm FFB in Air Hitam Village, namely:

Factors Affecting the Price of Palm Oil Fresh Fruit Bunches

1. Plant Age

The older age of oil palm plants, the quality of FFB produced tends to decrease, including oil content and yield. This causes the price of oil palm FFB from old plants to be lower than young plants. The age of the plant is a critical factor in determining the quality of FFB. Young plants tend to produce higher-quality FFB with higher oil content and yield, resulting in a higher price.

2. Free Fatty Acid Levels (FFA Levels)

FFA levels are indicators of FFB quality. The higher the FFA level, the lower the quality of FFB, because it shows the decay process. Palm oil mills usually provide lower prices for FFB with high FFA levels. FFA levels are a critical factor in determining the price of FFB. FFB with high FFA levels are considered of lower quality and are therefore priced lower.

3. Post-Harvest Operational Costs

This cost includes the cost of transportation, collection, and loading of FFB from the garden to the factory. Although it does not significantly affect the price of FFB, this cost can affect farmers' profitability. Post-harvest operational costs are an essential factor in determining the profitability of farmers. Minimizing these costs can help farmers increase their profitability.

4. Government Policy

Government policies related to FFB prices, such as reference pricing policies, can affect the price of FFB received by farmers. However, this research shows that government policy does not significantly affect the price of FFB in Air Hitam Village. Government policies can have a significant impact on the price of FFB. However, in this study, it was found that government policy does not significantly affect the price of FFB in Air Hitam Village.

Further Analysis

This study shows that Age of plants and FFA levels is a dominant factor that affects the price of oil palm FFB in Air Hitam Village. This shows that Improving the quality of FFB through good plant maintenance and harvesting on time is very important to get a better price. The age of the plant and FFA levels are critical factors in determining the quality of FFB. Improving these factors can help farmers increase their profitability.

In addition, although post-harvest operational costs do not significantly affect the price of FFB, Optimization of supply chains to minimize this cost is still important for farmers to increase profitability. Minimizing post-harvest operational costs can help farmers increase their profitability.

Recommendation

Farmers in Air Hitam Village need to increase the knowledge and practice of good palm oil cultivation to produce high-quality FFB.
Farmers can negotiate with oil palm factory to get a more just price based on the quality of FFB produced.
The government needs to strengthen supervision of the implementation of FFB price policies and provide assistance to farmers to improve the quality of FFB and the efficiency of the supply chain.

By understanding the factors that influence the price of FFB, oil palm farmers in Air Hitam Village can take strategic steps to increase their profitability and welfare.

Conclusion

This study provides important information for oil palm farmers in Air Hitam Village to understand the factors that affect the price of FFB and how they can improve the quality of FFB and minimize operational costs to get greater profits. The study highlights the importance of improving the quality of FFB through good plant maintenance and harvesting on time, as well as optimizing supply chains to minimize post-harvest operational costs. By understanding the factors that influence the price of FFB, oil palm farmers in Air Hitam Village can take strategic steps to increase their profitability and welfare.
Q&A: Factors Affecting the Prices of Fresh Palm Oil Fruit Bunches

Introduction

In our previous article, we discussed the factors that affect the prices of fresh palm oil fruit bunches (FFB) received by farmers in Air Hitam Village, Lima Puluh District, Batubara Regency. In this article, we will answer some of the frequently asked questions related to the factors that affect the prices of FFB.

Q: What is the most significant factor that affects the price of FFB?

A: The most significant factor that affects the price of FFB is the age of the plant. The older age of oil palm plants, the quality of FFB produced tends to decrease, including oil content and yield. This causes the price of oil palm FFB from old plants to be lower than young plants.

Q: How does the free fatty acid (FFA) level affect the price of FFB?

A: FFA levels are indicators of FFB quality. The higher the FFA level, the lower the quality of FFB, because it shows the decay process. Palm oil mills usually provide lower prices for FFB with high FFA levels.

Q: What is the role of post-harvest operational costs in determining the price of FFB?

A: Post-harvest operational costs include the cost of transportation, collection, and loading of FFB from the garden to the factory. Although it does not significantly affect the price of FFB, this cost can affect farmers' profitability.

Q: How can farmers improve the quality of FFB to get a better price?

A: Farmers can improve the quality of FFB by practicing good palm oil cultivation, including maintaining healthy plants, harvesting on time, and minimizing post-harvest losses.

Q: What is the role of government policy in determining the price of FFB?

A: Government policies related to FFB prices, such as reference pricing policies, can affect the price of FFB received by farmers. However, this research shows that government policy does not significantly affect the price of FFB in Air Hitam Village.

Q: How can farmers negotiate with oil palm factories to get a more just price for their FFB?

A: Farmers can negotiate with oil palm factories by providing evidence of the quality of their FFB, including laboratory test results and certification from reputable organizations.

Q: What is the importance of optimizing supply chains in minimizing post-harvest operational costs?

A: Optimizing supply chains can help farmers minimize post-harvest operational costs, including transportation, collection, and loading costs. This can help farmers increase their profitability and competitiveness in the market.

Q: What are the benefits of improving the quality of FFB?

A: Improving the quality of FFB can help farmers increase their profitability and competitiveness in the market. It can also help farmers to access higher prices for their FFB and to improve their reputation in the industry.

Conclusion

In conclusion, the factors that affect the prices of fresh palm oil fruit bunches (FFB) received by farmers in Air Hitam Village, Lima Puluh District, Batubara Regency, are complex and multifaceted. By understanding these factors, farmers can take strategic steps to improve the quality of their FFB and to increase their profitability and competitiveness in the market.