Cayenne pepper is one of the most popular horticultural commodities among the community. Many farmers are engaged in cayenne pepper farming. This is because cayenne pepper has a high economic value. This cayenne pepper farm income cannot be separated from the existing marketing system. The marketing system is a unified sequence of marketing institutions that perform marketing functions that are useful for facilitating the flow of commodities from producers to end consumers. In this case, marketing is the most important activity and has a major role in the income earned by farmers [1].

Marketing is a complex activity that includes collecting commodities from farmers, packing, storing and distributing. An efficient marketing system will encourage low marketing margins so as to increase income at the producer level (farmers), low prices for consumers and normal profits for the marketing institutions involved. The marketing system is said to be efficient if marketing activities run at a minimum cost [2]. 

According to [3], there are five commodities whose production dominates in Mojokerto district in 2021, namely shallots, cayenne pepper, water spinach, leeks and tomatoes. Cayenne pepper ranks second after shallots. From 2017 to 2021 cayenne pepper has increased every year. One of the sub-districts with the largest cayenne pepper producer is Dawarblandong sub-district. Dawarblandong District is a sub-district located in Mojokerto Regency which consists of 18 villages. The majority of the population works as farmers. Various commodities are cultivated by the residents of Dawarblandong Subdistrict, such as rice, corn, cayenne pepper, water spinach and soybeans. However, the income from the cayenne pepper commodity is quite large compared to other commodities. So that many farmers are engaged in cayenne pepper farming. The results of cayenne pepper production in the sub-district can be seen in Table 1.

Table 1 shows that Talunblandong village has no cayenne pepper harvest area, because farmers in Talunblandong village prefer to grow water spinach and corn. The harvest area of Pucuk Village ranks sixth but the production yield ranks second after Bangeran Village. This shows that the cayenne pepper farmers in Pucuk Village    are experienced  in farming so that they produce quality cayenne pepper. Farmers in Pucuk Village do not sell their products directly to the market in the big city every harvest, this is due to the limitations owned by farmers such as transportation equipment. The community in Pucuk Village harvests simultaneously which can result in narrow marketing of cayenne pepper, so that farmers sell more cayenne pepper to intermediary traders. This condition causes the benefits obtained by farmers to be relatively small and can weaken the position of farmers because of the weak bargaining power of farmers, especially in the matter of pricing.

From this background, researchers want to know the marketing margins of each existing marketing channel. The objectives of this study are (i) to describe marketing channels and marketing functions (ii) to analyze margins, marketing costs, farmer's share of each cayenne pepper marketing channel in Pucuk Village, Dawarblandong Sub-District, Mojokerto Regency.

This research was conducted in Pucuk Village, Dawarblandong Sub-District, Mojokerto Regency based on the consideration that the village is one of the largest and best cayenne pepper producing areas in Dawarblandong Sub-District. The research was conducted from April to May 2022. The data used in this study are primary data and secondary data. Primary data were obtained directly from the field, namely from interviews with respondents using questionnaires. Secondary data was obtained from various Agricultural Extension Center Dawarblandong Sub-District and BPS Mojokerto Regency. 

The population in this study were farmers who cultivated cayenne pepper in Pucuk Village, Dawarblandong Sub-District, Mojokerto Regency. The total number of cayenne pepper farmers was 595 farmers. Sampling of farmers using accidental sampling method is a sampling technique based on chance. According to Arikunto [4], sampling is taken 10% of the total population. So that a sample of 60 cayenne pepper farmers was obtained. While sampling traders using the snowball sampling method, this technique is taken following the marketing flow from producers to end consumers. For collecting traders as many as 18 people, wholesalers as many as 6 people and retail traders as many as 20 people. 

The data analysis method used in this research is descriptive analysis to describe the marketing channels and functions in Pucuk Village, Dawarblandong Sub-District, Mojokerto Regency. Margin, marketing cost and farmer's share using marketing margin and farmer's share analysis. The marketing margin describes the difference in price paid by the first marketing institution and the next marketing institution. The margin analysis also shows the share received by farmers. This study calculates the cost of each harvest, namely in April - May (3rd - 4th harvest).

To calculate the marketing margin, use the following formula:

M = Hp - Hb

Tabel 1: Land Area and Production of Cayenne Pepper by Village in 2021

Source : BPP Dawarblandong Sub-District, 2022

Description

• M: Marketing Margin (Rp / Kg)

• Hp: Sales Price (Rp / Kg)

• Hb: Purchase Price (Rp / Kg)

To calculate the total margin, the following formula is used:

MT = M1 + M2 + M3 + ...... + Mn

Description

• MT: Total Margin (Rp/Kg)

• M1: Margin at Marketing Institution 1 (Rp / Kg)

• M2: Margin at Marketing Institution 2 (Rp / Kg)

• M3: Margin at Marketing Institution 3 (Rp/Kg)

• Mn: Margin at the next Marketing Institution (Rp / Kg)

Marketing costs are costs incurred by each marketing institution involved. Marketing costs in this study were calculated by summing up all costs incurred by each marketing institution. 

For the share of the price received by farmers can be calculated by the following formula:

Spf = x 100%

Description

• Spf: Price Share received by Farmers (%)

• Pf: Farmer-level price (Rp/Kg)

• Pr: Price at the consumer level (Rp / Kg)

General Situation of the Research Area

Pucuk Village is one of 18 villages in Dawarblandong Subdistrict, Mojokerto Regency. Geographically, Pucuk Village is located at an altitude of 75 meters above sea level. The climate in Pucuk Village is a tropical climate with two seasons, namely the rainy and dry seasons. The air temperature ranges from 230C - 320C. The average rainfall is 189 mm. To find out the land area by use, see Table 2.

Pucuk Village covers an area of 426.655 ha, with most of the land used for agricultural purposes, covering an area of 390.970 ha consisting of rice fields and tegal, with the remainder used for residential purposes. Others in Table 2 are used for yards or vacant land.

Characteristics of Respondents of Cayenne Pepper Farmers

Farmers in managing their farms can determine what commodities will be cultivated on the land they own. However, in determining the commodity to be planted, it is inseparable from the factors that can affect cayenne pepper farming, including age, land area, education level, number of dependents and farming experience. The characteristics of cayenne pepper farmers can be seen in Table 3.

The respondents were 60 farmers. Based on Table 3, it can be seen that age is one of the most important factors for farming. The age of most farmers to do cayenne pepper farming is between the ages of 50 - 67 years, while the population aged 23 - 40 years is very small to do cayenne pepper farming this is because the majority of 23 - 40 years old prefer to work outside the village, for example working in factories, construction coolies, offices and teachers. There is even a prestige to enter the world of agriculture. So that those who manage the land are quite old residents but they are still able to do farming.

Table 2: Details of Land Use in Pucuk Village

Source : BPP Dawarblandong Sub-District, 2022

Table 3 Characteristics of Respondents of Cayenne Pepper Farmers in Pucuk Village

Source: Primary data processed, 2022

Farmer education is in the form of formal and non-formal education. This study the level of education is devoted to formal education. In Table 3 it can be seen that the highest level of education is found in farmers who graduated from elementary school with a total of 29 people or 48,3% and the lowest is a farmer who has a bachelor's degree as many as 5 people or 8,3%. This is because the age of farmers who are classified as old and also the majority of the village community is more dominant elementary school graduates.

The number of family dependents will affect the farms they manage. The farmer's family dependents in question consist of wife, husband, children and other family members who live in one house or not and become living dependents of the respondent. Farming experience is said to be experienced if it has been doing farming >10 years. It is said to be sufficient if farmers do farming 5 - 10 years. For farmers who do farming <5 years then categorized less experienced. In Table 3 it can be seen that all chili farmer respondents are experienced in farming so as to increase the income of cayenne pepper farming.

Land area is the area of rice fields or tegal that is used to grow crops in a particular season. The land owned by these farmers is privately or individually owned land. So farmers in this study are owners and cultivators. The majority of land owned by farmers in this study is narrow land because there is a system of heirs with relatives and some land is used for planting corn.

According to Alimin et al. [5], states that, marketing is a very important activity or activity in a business, even marketing is the spearhead of business success in providing profits through the activity of selling goods or services produced from the business. In a marketing there is a marketing channel where in the marketing channel there are marketing institutions involved in channeling commodities to end consumers.

The cayenne pepper marketing channel in Pucuk Village is as follows:

• Marketing channel I is a three-level channel 

Farmers à Collector Traders à Wholesalers à Retailers à Consumers

• Marketing channel II is a two-level channel 

Farmers à Wholesalers à Retailers à Consumers

In marketing channel I, there are three marketing institutions, namely intermediary traders, wholesalers and retailers. Meanwhile, marketing channel II has two marketing institutions, namely wholesalers and retailers. Sales and purchases of cayenne pepper in Pucuk Village are made directly as well as payments.

Marketing Functions of Cayenne Pepper

Marketing functions basically aim to facilitate the flow of goods or products from producers to consumers, besides that it can also increase the selling value of an item. Marketing functions that exist must facilitate the process of distributing goods or products. The marketing functions of cayenne pepper in Pucuk Village based on the theory of Sudaryanto, 2016 in Rauf et al. [6], can be seen in Table 4.

Table 4: Marketing Functions of Cayenne Pepper in Marketing Channels

Source : Primary data processed, 2022.

Description: A = Sales, D = Transport                   G = Risk Coverage, + = Doing Activities, B = Purchases, E = Storage, H = Sorting and Grading, - = Not Doing Activities, C = Packaging, F = Finance, I = Market Information

Table 5: Margin, Marketing Cost and Farmer's Share of Cayenne Pepper in Pucuk Village

In marketing channel, I, there are 52 farmers who sell their cayenne pepper crops through this marketing channel and 8 farmers who sell their crops in marketing channel II. For marketing institutions, there are collecting traders, large traders and retailers. There are 18 intermediary traders, 6 large traders and 13 retailers. While marketing channel II there are 8 farmers, 2 large traders and 7 retail traders. 

Based on Table 4 above, each marketing channel performs exchange functions, physical distribution functions and intermediary functions. The exchange function includes sales and purchases. These sales occur to farmers, collecting traders, large traders and retail traders. Purchases occur at the marketing institutions of intermediary traders, wholesalers and retailers. Farmers do not purchase cayenne pepper because they harvest it themselves. In this exchange function, there are activities to move goods from one marketing institution to another, to the final consumer.

The physical distribution function includes packaging, transportation and storage. In marketing channels I and II, farmers pack cayenne pepper. This packaging uses sling sacks and plastic bags if the amount of cayenne pepper during harvest is small. Packaging is done to protect cayenne pepper from sunlight so that it is not damaged. In marketing channel I, farmers do not transport cayenne pepper because when the harvest is directly approached by the collecting traders. Meanwhile, in marketing channel II farmers do transportation because they sell their crops directly to large traders. Farmers do not store cayenne pepper because they do not dare to take risks such as sudden price drops when sold the next day. So farmers immediately sell the cayenne pepper harvest on that day. All marketing institutions in marketing channels I and II perform the physical distribution function. However, the collecting traders in marketing channel I do not carry out storage, but the cayenne pepper is sold directly to large traders on the same day. Retailers in marketing channels I and II do not carry out transportation because it is the big traders who approach retailers to distribute cayenne pepper.

Packaging carried out by collector traders and wholesale traders uses sling sacks and plastic bags if the demand for cayenne pepper is in small quantities. Packaging at retailers uses plastic or plastic bags that are small, medium, or large in size. Transportation is carried out using a pick-up car. From the collecting traders, it is transported to the big traders, then the big traders transport the cayenne pepper back to the retailers. In marketing channel I, cayenne pepper is distributed to retailers in the Tanjung Mojokerto market, Balongpanggang market and Mantup market. While in marketing channel II, cayenne pepper is distributed to retailers in the Jetis market and Randegan market. Storage in marketing institutions is done when cayenne pepper is not sold on the same day. Aka but storage is done not long about 2 - 3 days.

Intermediary functions consist of financing, risk-bearing, sorting and grading and market information. In Table 4, financing is carried out by the marketing institutions involved, namely collecting traders, wholesalers and retailers. The costs incurred by these marketing institutions include transportation, labor wages, rental of premises/shophouses, electricity, water, sling sacks, plastic bags, storage and garbage fees. Risk coverage is carried out by all marketing institutions involved in each marketing channel. This risk occurs due to the decline in the quality of cayenne pepper and the shrinkage of weight caused by damaged cayenne pepper and starting to dry.

Sorting is done by farmers when harvesting in the field. Selecting chilies that are ripe and not attacked by disease and to get the best quality cayenne pepper. Collecting traders and large traders also sort and grade cayenne pepper by separating damaged cayenne pepper from good cayenne pepper. Retailers do not do sorting and grading, when there are consumers who buy cayenne pepper, retailers immediately weigh the cayenne pepper requested by consumers without sorting out which ones are good and not good. market information is carried out by all marketing institutions, both in marketing channels I and II. Market information in marketing is needed, both from the farm level to the retailer level. Market information aims to find out the prevailing purchase price at the next marketing institution and the demand for cayenne pepper.

The functions of cayenne pepper marketing in marketing channels I and II in Pucuk Village are in accordance with the results of research from Nurhayati [7], which states that the marketing functions that occur in each cayenne pepper marketing agency are different. Each cayenne pepper marketing agency has different activities or activities, tailored to the needs of each marketing agency.

Margin and Cost of Cayenne Pepper Marketing

Marketing margin is the difference between the price at the consumer level and the price at the producer level (cayenne pepper farmers). The more marketing institutions involved in the marketing channel, the greater the marketing margin formed. Marketing margins include all costs incurred in the process of moving cayenne pepper from farmers to end consumers as well as the profits earned by marketing institutions. The size of the marketing margin is influenced by marketing costs and marketing agency profits. Marketing costs are costs incurred by marketing institutions in the cayenne pepper marketing process. The following is a table of margins, marketing costs and farmer's share of cayenne pepper in Pucuk Village, Dawarblandong Sub-District, Mojokerto Regency.

Based on Table 5, it can be seen that the marketing margin in marketing channel I is the highest at the intermediary traders at Rp. 13.000/kg. while in marketing channel II the highest marketing margin is at large traders. This is because farmers sell their crops directly to large traders so that large traders take a fairly large margin. However, the selling price of cayenne pepper obtained by farmers is also large compared to marketing channel I, which is Rp. 44.000 / kg. So the total marketing margin in marketing channel I is Rp. 31.500/kg while in marketing channel II it is Rp. 24.000/kg.

Marketing costs are costs incurred by marketing institutions in the cayenne pepper marketing process. These marketing costs include transportation, labor wages, storage, electricity, place rental, garbage fees, glangsing sacks and plastic bags. The highest marketing costs in marketing channel I are found at retailers at Rp. 2.377,97/kg. In Table 5 it can be seen that the total costs incurred by all marketing institutions involved in marketing channel I amounted to Rp. 6.186,67/kg. While in marketing channel II, the total costs incurred by all marketing institutions involved amounted to Rp. 4.552,05/kg.

Every marketing institution certainly expects profit in return for a marketing activity. The profit in this study is the selling price of cayenne pepper minus the purchase price of cayenne pepper and marketing costs per kilogram. Based on Table 5, it can be seen that in marketing channel I, the biggest profit lies in the collecting traders' marketing institution which is Rp. 11.326,03/kg and the smallest profit of the marketing institution in channel I is in the retailer which is Rp. 6.122,03/kg. While in marketing channel II the biggest profit is in the marketing agency of large traders, namely Rp. 11.917,13/kg. This is because in marketing channel I the collector traders as the first marketing institution in the cayenne pepper marketing process so that they can take relatively large profits. 

Farmer's share is the ratio of the price received by farmers to the price paid by consumers. The size of the farmer's share value is influenced by the selling price at the farm level and the purchase price at the consumer level. Based on research on cayenne pepper marketing in Pucuk Village, it is known that the farmer's share of the two marketing channels is for marketing channel I of 56,25%, the remaining 43,75% is received by the marketing institutions involved. Marketing channel II farmers share value of 64,70% and the remaining 35,30% is received by the marketing institutions involved. Marketing channel I farmer's share value of 56,25% means that of every Rp. 100/kg paid by consumers then distributed to farmers amounting to Rp. 56,25/kg. While in marketing channel II the value of farmers share is 64,70%, this means that it shows that from every Rp. 100/kg paid by consumers, it is distributed to farmers amounting to Rp. 64,70/kg. The more shares received by farmers, the more profit for farmers.

The results of this study are in accordance with research conducted by Hia et al. [8], which states that the more marketing institutions that are passed, the higher the marketing margin and vice versa, so that the price at the final consumer level is higher. The number of marketing institutions involved also affects the farmer's share received by farmers. The more marketing institutions that are passed in cayenne pepper marketing, the farmer's share obtained by farmers is also low compared to a few marketing institutions.

Based on the results of the research and discussion described, it can be concluded that: 

• There are two chili marketing channels in Pucuk Village. All marketing agencies perform marketing functions according to the needs of each marketing agency

• The marketing margin on marketing channel I is Rp. 31.500/kg and on marketing channel II is Rp. 24.000/kg. For the total marketing costs of cayenne pepper in Pucuk Village incurred by marketing institutions in accordance with the marketing functions, namely, in marketing channel I which amounted to Rp. 6.186,17 / kg while marketing channel II amounted to Rp. 4.552,05 / kg. farmer's share in marketing channel II is higher than marketing channel I which is 64,70%

Suggestion

Based on the results of the research and discussion that has been described, the advice to be conveyed is that cayenne pepper farmers are expected to actively study market information related to the prevailing price of cayenne pepper so that they can choose marketing channels that are profitable for farmers without paying attention to social factors.

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