Effect of Paddy Price on the Income of Rice Farmers in Kiaea Village in Southeast Sulawesi

Abstract

This study examines how paddy (unhusked rice) prices influence the income of rice farmers in Kiaea Village, South Konawe District, Southeast Sulawesi, Indonesia. A survey of 39 rice farmers (out of 351 total farmers in the village) was conducted using simple random sampling. Data were collected through direct interviews with farmers using structured questionnaires. Descriptive income analysis was combined with multiple linear regression to evaluate the effect of the current year’s farm-gate paddy price and the previous year’s price on farmers’ income. The results show that the average production per farmer was around 6.2 tons of paddy per planting season, yielding the mean net income of about IDR 24,831,686 per season. Regression analysis indicates that paddy price variables jointly have a statistically significant impact on farm income. In particular, the previous year’s paddy price had a positive and significant influence on farmers’ income, while the current year’s price showed no significant effect. These findings imply that farmers make production decisions based on expected prices (as reflected by the prior year’s price), and that sustained improvements in farm income may require stable or rising paddy prices before planting. The government’s floor price policy for paddy appears to motivate increased production and can enhance farmer incomes, but complementary measures are needed to address the many other factors affecting income.