Increasing in Marketing Performance of Smallholders Natural Rubber Through Supply Chain Optimization

Rubber price received by smallholders in Indonesia is lower compared with other countries due to inefficient marketing system. Therefore, it needs an effort to increase in the supply chain performance. The objective of the research was to analyze marketing system of natural rubber and the effect of supply chain management on marketing efficiency. The research was conducted at Tebo Regency of Jambi Province from December 2014 until February 2015. Marketing system was analyzed using B/C ratio and value-added approach, whereas supply chain was carried out using a supply chain network approach. The results showed that there were four patterns in the marketing channels of natural rubber. Pattern I (farmers – village traders - subdistrict traders - district traders - industries); Pattern II (farmers – village traders - district traders - industries); Pattern III (farmers –auction market - industries); and Pattern IV [farmers –Rubber Processing and Marketing Unit (RPMU) – industries]. The supply chain management was only found in the Pattern IV, where there was an agreement between farmers and the RPMU to improve the quality of rubber for higher price. In addition, farmers also received advocation and training from the RPMU. Pattern IV exhibited improvement marketing efficiency as indicated by a B/C ratio at 1.29 and value added at 96.82%. The adoption of SCN framework was able to motivate farmers to produce a better quality of rubber that afforded a higher price. Therefore, the government is necessarily to recommend the addoption of this pattern in increasing farmers' income