The rational choice of vegetable farmers in the revocation of fertilizer subsidies

¹ Department of Agribusiness, Faculty of Agriculture and Animal Science, University of Muhammadiyah Malang, 65144 East Java, Indonesia
² Faculty of Agriculture, University of Muhammadiyah Bengkulu, Indonesia
³ Faculty of Technology Management and Technopreneurship, Universiti Teknikal Malaysia Melaka, Melaka, Malaysia

^* Corresponding author: jabal@umm.ac.id

Abstract

This research aims to elucidate farmers’ thoughts about the revocation of fertilizer subsidies, explore the rational actions behind their decision to deal with the fertilizer shortage due to the costly prices and develop actionable plans to support farmers regarding subsidized fertilizer revocation. The results show that farmers understand the policy of fertilizer subsidy revocation as a form of the government’s workload. Since farmers think that the government pays little attention, they hope it will change its fertilizer subsidy policy. Demography-wise, older farmers are still hoping for fertilizer subsidies, while young farmers are more realistic and have shifted to producing organic fertilizer and other alternatives. Notably, farmers respond to the scarcity of subsidised fertilizer through preferencebased actions and existing resources. Based on these two, farmers’ rational choices are classified into five actions: Using non-subsidized fertilizers, using subsidized fertilizers illegally, reducing the use of subsidized fertilizers on other commodities – leaving the rest for vegetables, using organic fertilizers of self-made or store-bought, and choose to not fertilize. The manufacture and use of organic fertilizer from local raw materials have not been implemented.