COMPETITIVENESS RICE FARMING IN SRAGEN REGENCY

Rice is indonesian agriculture major crop. Indonesian rice historically has been the primary staple food and is an important economic driver and cultural symbol. On the basis of Sragen regency is one of the major rice producer in Central Java. This research aims to determine the level of private and social profitability and competitiveness of rice farming in Sragen regency. Policy analysis matrix (PAM) is the approach used to determine the level of profitability and competitiveness of rice farming in Sragen Regency. Sampling conducted by Simple Random Sampling of the 20 districts in Sragen which are rice production area. The results show that the value of profit for private and social is IDR 9.989.911,16 and IDR 4.273.004,18 respectively. Rice farming in Sragen Regency is profitable and feasible to cultivate. Two indicators to measure the competitiveness were Private Cost Ratio (PCR) which later shows that rice farming in Sragen Regency is more competitive as the PCR < 1, and Domestic Resources Cost Ratio (DRCR) shows that the rice farming has a comparative advantage as the DRCR < 1.


INTRODUCTION
Rice is indonesian agriculture major crop.Indonesian rice historically has been the primary staple food and is an important economic driver and cultural symbol (Rahmasuciana et al., 2015).The government policies to control stocks and imports have kept prices above world price levels and enhanced the ability of farmers (Giamalva, 2015).
The priority agenda of the government is directing the agricultural development forward to attain food sovereignty, and as a nation the government of Indonesia should be able to arrange and meet their food needs of the people.Sovereignty food translated in the form of the ability nation to things: satisfy the needs of food of domestic production, set food policy independently, and protecting and welfare farmers as leading perpetrator of agricultural food businesses.In other words, food sovereignty can be initialized by selfsufficient food that gradually followed by the enhancement of value added agricultural businesses widely for enhancing the welfare of farmers (Hanani, 2012;Permatasari & Vita, 2016).
The rice farming faces challenges from rising production costs, the migration of farm labor to other sectors of the economy, a decline in the average farm size, the conversion of agricultural land to other uses, deteriorating and inadequate irrigation infrastructure, and stagnant yield growth (Mulyana, 2012;Lukmanto and Rullan, 2015).These factors threaten the ability of the Indonesian rice farming to grow enough to meet the goal of selfsufficiency in the future as population continues to expand (Suryana, 2014) .
Indonesia is the third largest producer of rice in the world.The rice production in Indonesia is 44,6 million metric tons or about 9 percent of global production in 2014 (FAO, 2015).
In other side Indonesia is also a rice deficit country, and thus must import rice regulary to meet their needs.The financial and economic analyses are thus complementary, the financial analysis takes the viewpoint of individual and the economic analysis that of the society.In financial analysis market prices are normally used.These take into account taxes and subsidies.In economic analysis some market prices may be changed so that they more accurately reflect social or economic values.These adjusted prices are called shadow prices (Dreze and Stren, 1990).
The competitiveness is a concept that states the ability of a producers to produce a commodity or product with the quality is quite good and costs is quite low so the prices that occurred in markets commodity or the product can be produced and marketed by the producers to earn the sufficient profits so it can sustain the cost of production.(Aprilia et al., 2015).
Measurement of the competitiveness of a commodity or product can be measured by two approaches.Both of those approaches is the level of profits generated and the efficient operation of commodity or product.Through The first approach is the level of profits generated can be viewed from two sides those are private profits and social profitability.Whereas, through approach to the efficient operation of commodity or product, can be viewed from two indicators of comparative advantage and competitive advantage.(Zhong et al., 2010).
The Domestic resources cost (DRC) concept compares the opportunity costs of domestic resources (primary factors such as labor, capital, land) committed to the production of final goods with prices at which these goods can be exported or imported, the latter prices (the foreign exchange gained or saved) being considered as the ensuring benefits from production.The rationale for using the foreign exchange gained (through exports) or saved (through imports) as a standard of reference is that foreign exchange is relatively, and often critically, scarce in many developing countries (Banerji & Donges, 1974).
The reason that international trade causes this increase in world output is that it allows each country to specialize in producing the good in which it has a comparative advantage.A country has a comparative advantage in producing a good if the opportunity cost of producing that good in terms of other goods is lower in that country than it is in other countries (Handoyo et al., 2012;Andini et al., 2016).
In the analysis of farming is often conducted through by financial analysis (private) and economic analysis (social).
Financial analysis of cost data used is real data that is actually issued, while the economic analysis of the data used is according to the size of the shadow price (Soekarwati, 2006).
Policy Analysis Matrix (PAM) is a tool or approach that examines the impact of government policy on agriculture both pricing policy and investment policy.
According to Pearson et al.(2005), the three main objectives from the PAM method are (1) to provide information and analysis to help decide agricultural policy related to the issue of the competitiveness of farming, the impact of public investment in the construction of new infrastructure on the efficiency of farming systems, and last issue is the impact of new investments in the form of research and technology, (2) to calculate the level of social profits of a farming, produced by assessing output and cost of efficiency prices (social opportunity costs), 3) to calculate the transfer effects, as the impact of a policy.PAM method calculates the impact of policies affecting output and factors of production (land, labor and capital).
According to Pearson et al., (2005), the policy analysis matrix (PAM) approach is a system of double-entry bookkeeping.To determine the number of samples, Slovin's formula was used (Sugandi, 2014).
error.The size of the farmer population is around 141.961 with the level margin of error is 10%, so that the number of samples taken consisted of 100 respondents rice farmers in Sragen spread in the 20 districts (Table 1).The instrument used in this study is a questionnaire.
The method of analysis utilized to measure profitability (social and private) and competitiveness of rice farming in Sragen Regency was the Policy Matrix Analysis (PAM) (Table 2).The policy analysis matrix is a product of two accounting identities, one defining profitability as the difference between revenues and costs and the other measuring the effects of divergences (distorting police and market failures) (Kanaka & Chinnadurai, 2015).
To apply the PAM method, the first step is to construct a table of private budgets, using quantities and prices of inputs and outputs in actual market prices.
The next step is to construct a table of social budgets, using social prices for both inputs and outputs.The social prices of tradable commodities are given by comparable world prices.These prices are compared with domestic prices at the identical location, over the same period, and with comparable quality.Social prices for tradable are found by calculating import parity for goods that substitute for imports and export parity prices for goods that enter export markets (Pearson et al., 2005).
The PAM is comprised of revenues, The second row of Table 5 provides a measure of social profitability utilizes social prices.These valuations measure comparative advantage or efficiency in the agricultural commodity system (Pearson et al., 2005).The average production per hectare is 5.6 tons.
The first step to apply the PAM method is to construct a table of private budgets, using quantities and prices of inputs and outputs in actual market prices (Table 3).The next step is to construct a table of social budgets, using social prices for both inputs and outputs ( Government policies, especially in the form of subsidies will inhibit the efficient allocation of resources and thus creates divergences.
The results of the analysis (Table 6) indicate that the PCR of rice farming in Sragen Regency was 0,57 (less than

CONCLUSION AND SUGGESTION
Based on research findings, it can be concluded as follows: rice farming in Sragen Regency is profitable as privately I am sincerely grateful to them for sharing their truthful and illuminating views on a number of issues related to the project.
Indonesia's rice imports during 2000-2014 were erratic with average 1,26 million matric tons.This inconsistency reflects the Indonesian government's efforts to maintain self-sufficiency in rice and to strictly control imports to fill domestic shortfalls.Import volumes thus depend both on domestic production levels and government procurement targets, which fluctuate annually.As a platform for the national food system, almost all districts/cities in central java have large rice field area.Kinds of rice grown in central java consisting of rice planted in wet land and dry land rice area, but actually the harvesting area and rice production in central java potentially could be developed so that is expected to have high competitiveness.Sragen is one regency in Central Java to the production of large enough besides Cilacap, Grobogan, Brebes, and Demak regency.

Figure 1 .
Figure 1.Map of Sragen Regency Source: Badan Pusat Statistik (BPS) (2015) Sragen Regency is one of 35 districts located in the province of Central Java.Astronomically, Sragen Regency is located between 110°45' to 111°10' east longitude and 7°15' to 7°30' south latitude.In terms of geographic position, Sragen regency has boundaries as follows: Grobogan Regency in north, Karanganyar Regency in south, Boyolali Regency in west, and Ngawi Regency, the Province of East Java in east (Figure 1).Sragen Regency has territory area of 941,55 Km 2 .It is divided into 20 Subdistricts and 208 villages.From the territory area, Sragen consists of 68,753 Hectare (73,02 %) agricultural land and 25.402 Hectare (26,98%) non-agricultural land.Sragen Regency having tropical climates and medium temperature.The average rainfall in Sragen is 3.287 mm per year and the sum of rainfall in Sragen is 173 days per year.A large number of areas in Sragen is lowland with an average height is 109 m above sea level.In addition, Sragen regency is irrigated by several rivers, one of Analysts using PAM have to provide complete and consistent coverage to all policy influences on returns and costs of agricultural production.The main empirical task is to construct accounting matrices of revenues, costs, and profits.Three principal issues can be investigated with the PAM approach: (1) the impact of policy on competitiveness and farm level profit,(2) the influence of investment policy on economic efficiency and comparative advantage, and (3) the effects of agricultural research policy on changing technologies.METHODSResearch of competitiveness of rice farming was conducted in Sragen, and selected by purposive sampling.The costs and profits, at private and social.The top row of the matrix is a budget showing costs of production and marketing at market prices, the only unusual aspect being the division of cost elements into two categories: tradable and domestic factor (non-tradable inputs)(Khai & Mitsuyasu, 2013).The second row in the matrix shows the same cost elements expressed at social prices.For tradable inputs, adjusted world prices are normally taken as social prices.The social price of domestic factors is taken as their opportunity cost, in other words the Return at the margin in the best available alternative.The third row of the PAM is simply the first row minus the second.It shows the net impact of distorting policies and market failure.The signs of the revenues and cost terms in the third row indicate whether the net effects of policy and market imperfections for these categories amount to an implicit subsidy or tax.The data entered in the first row of Table 2 provides a measure of private profitability.The term private refers to observed revenues and costs reflecting actual market prices received or paid by farmers.Private profits (D) are the difference between private revenues (A) and cost tradable inputs private added with cost domestic factors private (B+C).Using the PAM framework the private profitability (D) can be expressed as: Source : Monke andPearson (1989)  inAkhtar et al.(2007) Social profits(H)  are the difference between social revenues (E) and cost tradable inputs social added with cost domestic factors social (F+G).Using the PAM framework the Social profitability (H) can be expressed as: The Competitive advantage with an indicator Private Cost Ratio (PCR).PCR is the ratio of factor costs (C) to value added in private prices (A-B).This ratio measures the competitiveness of a commodity system at the farm level.The commodity system was competitive if the PCR is less than 1if the DRCR is less than 1, the system uses domestic resources efficiently and had a comparative advantage.If the DRCR is greater than 1, then the system shows inefficiency in domestic resource use and had a comparative disadvantage(Setiawan et al., 2014).The method of calculating the DRCR in the PAM framework is expressed as:The average age of respondents is 48.61Years farmers, the average education level of farmer respondents is high school, with an average area of farm 0.27 hectares.
and socially.It can be seen from the private and social profits are positive.Sragen rice farming has competitive and comparative advantage.This can be seen from the indicators PCR and DRCR smaller than one.Researchers have some suggestions for the advancement of the cultivation of rice in Sragen Regency: To increase profit and competitiveness farming rice the government should apply input subsidies and output prices protection.Beside with an input subsidies and output prices protection, the government should provide an infrastructure such as irrigation facilities to increase the productivity.Increased productivity is one way to increase the profit and farming rice competitiveness.ACKNOWLEDGMENT I am using this opportunity to express my gratitude to everyone who supported me throughout the course of this research paper.I am thankful for their aspiring guidance, invaluably constructive criticism and friendy advice during the project work.

Table 1 .
The Total Sample Per district Based On The Number Of Farmers In Sragen Regency 2013

Table 2 .
Policy Analysis Matrix

Table 4
Private Prices and Budgets of Rice Farming in Sragen Regency

Table 6 .
The Results Privat Cost Ratio (PCR) and Domestic Resource Cost Ratio (DRCR) of Rice Farming In Sragen Regency