Causality of Robusta Coffee Prices in the North Tapanuli Regency of North Sumatra Province

Document Type : Research Paper

Authors

1 Agribusiness Study Program, Faculty of Agriculture, Universitas Sumatera Utara, Medan, Indonesia.

2 Faculty of Economic and Business, Universitas Sumatera Utara, Medan, Indonesia

10.22124/cjes.2023.7207

Abstract

The North Tapanuli Regency cultivates two types of coffee: Robusta and Arabica; Robusta is the most significant amount of production. Robusta coffee is a commodity with strategic value in efforts to empower the people's economy. The more competition opens up in the Robusta coffee trade in domestic and international markets, the more farmers are required to produce highly competitive products. Should this situation be imbalanced by an increase in producer prices, it is expected to result in a decline in production and farmers' interest in cultivating Robusta coffee. It implies that price movements from consumers to producers are closely related to production performance. This research aims to analyze the causal relationship between the Robusta coffee prices among farmers, wholesalers, and retailers or consumers in North Tapanuli Regency. The analytical model used is the Granger Causality Test to analyze the cause-and-effect relationship between Robusta coffee prices in North Tapanuli Regency. The data used are secondary; the monthly data from 2016 to 2022 obtained 84. The results show no causal (reciprocal) relationship between Robusta coffee prices for wholesalers and retailers or consumers. However, there is a one-way relationship, i.e., Robusta coffee prices for retailers or consumers influence its price for wholesalers in North Tapanuli Regency.

Keywords

References

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Available Online from 25 October 2023

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