DOI: https://doi.org/10.22373/petita.v8i1.168
THE ROLE OF LOCAL GOVERNMENT IN MAINTAINING COFFEE PRICES VOLATILITY IN GAYO HIGHLAND OF INDONESIA
CHAIRUL FAHMI
Universitas Islam Negeri Ar-Raniry Banda Aceh, Indonesia Email: [email protected]
RAHMI PUTRI FEBRIANI
Universitas Islam Negeri Ar-Raniry Banda Aceh, Indonesia Email: [email protected]
LAILA MUHAMMAD RASYID
University of Göttingen, Göttingen, Germany Email: [email protected]
AHMAD LUQMAN HAKIM
King Abdulaziz University, Jeddah, Saudi Arabia Email: [email protected]
Abstract: During the Covid pandemic from 2019 until 2022, coffee prices in Gayo Highland have experienced multiple drops and high volatility. This study aims to investigate the role of the local government in maintaining the volatility of coffee prices in the Bener Meriah district of the Gayo Highland area. This study used data on coffee prices at the producer level, the planters and the reseller of examine the local government policy and practice, we use the theory of Tas’ir al-Jabari. The results show that the local government has issued several policies to protect the planters’ coffee prices, including activating the Warehouse Receipt System (WRS), conducting training and socialization on coffee management, and conducting coffee rehabilitation and rejuvenation programs. However, the local government’s effort has yet to be maximized due to the lack of power of the local government to intervene over the price volatility. The prices are heavily influenced by supply and demand, as are the prices of other commodities. Therefore, the local government’s policies for securing coffee prices have yet to be able to reflect the principles of at-Tas’ir Aljabari, in which the ruler has absolute authority to control and manage the market price of coffee beans in the Gayo Highland region.
Keywords: Local Government, Maintaining Coffee Prices, Volatility In Gayo Highland Abstrak: Selama pandemi Covid dari tahun 2019 hingga 2022, harga Kopi di dataran tinggi Gayo penurunan dan berfluktuasi. Penelitian ini bertujuan untuk mengetahui kebijakan pemerintah daerah dalam menjaga volatilitas harga di pasar lokal di wilayah Gayo. Penelitian ini menggunakan data harga kopi di tingkat produsen, pekebun dan reseller. Untuk mengkaji kebijakan dan praktik pemerintah daerah, kami menggunakan teori Tas’ir al-Jabari. Hasil penelitian menunjukkan bahwa pemerintah daerah telah mengeluarkan beberapa kebijakan dalam melindungi harga kopi pekebun, antara lain
dengan mengaktifkan Sistem Resi Gudang (SRG), melakukan pelatihan dan sosialisasi pengelolaan kopi, melakukan program rehabilitasi dan peremajaan kopi. Namun, upaya pemerintah daerah belum maksimal karena kurangnya kekuatan pemerintah daerah untuk melakukan intervensi atas anjloknya harga biji kopi di pasar. Semua harga sangat dipengaruhi oleh penawaran dan permintaan. Oleh karena itu, kebijakan pemerintah daerah untuk mengamankan harga kopi belum mampu mencerminkan prinsip at-Tas’ir Aljabari, yang mana pemerintah mempunyai hak absolut untuk mengontrol harga pasar terhadap komoditas biji kopi diwilayah dataran tinggi Gayo.
Kata Kunci: Pemerintah Daerah, Jaga Harga Kopi, Volatilitas Di Dataran Tinggi Gayo Introduction
In economic theory, prices are primarily determined by the balance of supply and demand.1 However, in the Islamic state, like in Aceh province, the price of products, either goods or services, must also comply with Islamic principles, in which the government has the right to set prices (at-tas’ir al-Jabari), especially the prices may harm peoples’ basic needs.2 From an Islamic perspective, the role of government is significant and necessary to control price fluctuations in the market. In this case, the part of the government is essential in improving the economic condition and stabilizing the prices.3 The market mechanism is not merely influenced by liberalism, though, which requires the free intervention of government. Still, the price condition in Islam also shall be based on rules made by the government. 4
This study focuses on the local government’s role in setting up a fixed price for coffee commodities in the Gayo highlands. This policy aims to avoid fluctuating prices over the significant income for the society in that region. Using the theory of tas’ir al-Jabari means that the government has the authority to set an actual price of such a commodity in the market.5 Hanafiyah school of thought, quoted by Karim, argued that tas’ir is permissible.6 Other scholars have also asserted that the government can set a fair price because it has the role and authority to regulate people’s lives for their benefit. There must be no tyranny in fixing the price.7 Most Islamic legal scholars agree that in an unstable economic situation, the government can intervene in the market to stabilize the prices of products that become people’s basic needs. However, this interference must be based on a legal basis and aimed at achieving justice. For example, the high inflation rate or monopoly practices cause unfair competition or domination in controlling such products or playing the prices. Hence, business actors are not justified in carrying out any acts of injustice or price exploitation that can cause market distortions.
During the Covid-19 pandemic, coffee bean prices in the Bener Meriah district experienced a drastic decline. This is caused by several factors, including the existence of export quota restrictions by foreign countries. This has caused the price to drop to IDR 50,000 per- 16 kilogram. Previously, the price of coffee reached IDR 130,000 per-16 kilogram.8 The decline in the price of this coffee commodity greatly impacted the people’s economy. At
1 Adiwarman Azwar Karim, Ekonomi Mikro Islami (Raja Grafindo Persada 2007).
2 Euis Amalia, Sejarah Pemikiran Ekonomi Islam: Dari Masa Klasik Hingga Kontemporer (Gramata Publishing 2010).
3 Sumarni, ‘Intervensi Pemerintah; Antara Kebutuhan Dan Pelonjakan Di Bidang Ekonomi’ (2013) 1 Economica, Jurnal Program Studi Ekonomi STKIP PGRI Sumatera Barat, p. 47.
4 ibid.
5 Nasrun Haroen, Fiqh Muamalah (Gaya Media Pratama 2007); Rosita, ‘Quo Vadis Pekerja Anak Pada Perkebunan Tembakau Di Kabupaten Jember’ (2017) 2 Petita : Jurnal Kajian Ilmu Hukum dan Syariah.
6 Adiwarman Azwar Karim, Sejarah Pemikiran Ekonomi Islam (Raja Grafindo Persada 2006).
7 ibid.
8 Interview with Anto, ‘Coffee Reseller on 27 November 2021 in Kampung Blang Paku, Wih Pesam Sub- District, Bener Meriah.’
could not stabilize the price because prices also influenced the price of Gayo coffee in the international market. Several coffee export destination countries have restricted the entry of the Gayo coffee commodity due to the pandemic’s peak. On the other hand, the farming community during this pandemic period obtained large yields.
Based on the description above, the authors want to examine the government’s responsibility to protect coffee prices in the Gayo land region, especially the Benar Meriah district. The main question in this research is “What is the government’s responsibility in maintaining the stability of coffee prices in the Bener Meriah district? And whether the role follows the Islamic law basis.
Research Method
This study uses an empirical normative approach, namely research that examines the implementation of a legal provision on the responsibility of the local government in protecting the price of coffee beans. In addition, this study uses qualitative research, namely solving problems by collecting, processing, analyzing data and drawing conclusions systematically and objectively.9 The primary data were obtained from interviews with farmers, agents, coffee cooperatives, the Department of Agriculture and the Department of Trade in Bener Meriah regency. At the same time, the secondary data in this study are gathered from books, journals, articles and other documentary materials related to this research.10 Then the data analysis used a descriptive-analytic approach, which is a method that aims to focus on discussing and dividing the problem as well as making a systematic, factual and accurate description of the facts related to this research.
Findings and Discussions
The definition of Tas’ir Al-Jabary’s theory
Etymologically, the word at-tas’ir means fixing the price. While al-Jabari means by force, at-tas’ir is a price determined for commodities that apply in the market. Islamic scholars argue that price fluctuations in an entity are closely related to at-tas’ir because the actual price is formed in the buying and selling process.11 According to Abd al-Karim Usman, the price of a commodity will be stable if there is a large stock of goods available in the market. Then it will provide stability between demand and supply. However, if merely a few commodities are available in the market, while there is a lot of consumer demand, price fluctuations will occur automatically.12 According to him, in this situation, the government is not allowed to interfere in the price issue. However, the government shall provide the commodity to stabilize the prince in the market. On the other hand, if there is a good stock of commodities in the market, but prices continue to rise, then the government needs strict supervision. If the price increase is caused by traders’ actions, for example, traders hoard goods intending to sell them after the price has increased. In cases like this, the government has the right to fix the price, and this price determination in Islamic jurisprudence is called at-tas’ir al-Jabari.13
Islamic Scholars’ Perspective on Fixing Prices
According to the majority of Islamic scholars (jumhur ulama), implementing tas’ir al-Jabari
9 Rifa’i Abubakar, Pengantar Metodologi Penelitian (Sunan Kalijaga Press 2021).
10 Sugiyono, Metode Penelitian Kuantitatif Dan Kualitatif (Alfabeta 2014).
11 Rozalinda, Fiqh Ekonomi Syariah (Raja Grafindo Persada 2016).
12 Abd Al-Karim Usman, Perekonomian Islam: Sejarah Dan Pemikiran (Raja Grafindo Persada 2020);
Yasrul Huda, ‘Islamic Sharia in Aceh And Its Implication in Other Other Regions in Indonesia; Case Study During Implementation Aceh As Nanggroe Aceh Darussalam’ (2020) 5 Petita : Jurnal Kajian Ilmu Hukum dan Syariah.
13 Nasrun Haroen (n 5).
requires several conditions: First, the commodity or service concerns the interests and needs of society. Second, the emergence of an arbitrary way of determining commodity prices by traders. Third, the ruler must be just. Fourth, the appointment of economists to assess the feasibility of market conditions. Fifth, price fixing does not harm the traders—
sixth, it guarantees supervision by the government at all times.14
In addition, if the price increase in the market is due to the actions of speculators, namely by hoarding goods, then the government must intervene to overcome the price problem in the market. However, government interference in fixing commodity prices, especially with coercion, must be carried out lawfully without causing harm to all parties. Hanafiyah scholars argued that forcing the price of a commodity is permissible in conditions where parties act fraudulently or hoard goods – where the goal is to stabilize the prices of goods in the market again. This follows Islamic teachings, namely the existence of government authority to regulate people’s lives and for the sake of achieving the benefit of the people.15 On the other hand, there are also some opinions of scholars who forbid forced price fixing or intervening in the market to determine a specific price. According to this opinion, the government cannot choose a price that can benefit one party and harm another.
Rasulullah SAW was once asked about the price in the market, and he answered that the price increase is God’s business, and it is not justified for someone to interfere in this matter. Likewise, if the government sets the price-fixing, then it is not impossible that traders will be reluctant to sell their merchandise, and traders can hoard goods because the prices charged are not following their wishes. If this happens, the market will be more chaotic and various interests will be neglected.16
While Abu Yusuf argues that prices do not depend on supply alone but are also influenced by demand; therefore, the increase or decrease in price is not always associated with a reduction or increase in production. However, there are several other influencing variables. Some of these variables include shifts in demand or the amount of money circulating in a country, hoarding and holding goods or all of these things.17 Abu Yusuf also said, “All policies of the authorities must refer to the benefit of the people”18. Therefore, when parties manipulate prices, the government may intervene to regulate them and fix fluctuating commodity prices.
Finally, according to Ibnu Khaldun, if a city develops and subsequently has a large population (a big city), basic needs will be prioritised. As a result, supply increases, and this means lower prices. Ibn Khaldun also explained the mechanism of supply and demand in determining the equilibrium price. In more detail, he describes the effect of competition among consumers to obtain goods on order.19 For Ibn Khaldun, price results from the law of supply and demand, except for gold and silver prices, which are monetary standards. On the other hand, all other goods are subject to price fluctuations depending on the market.
The price is high if an item is rare and in high demand. Conversely, if an item is abundant, the price will be low.20
14 Qusthoniah, “Tas’ir Al-Jabari (Penetapan Harga Oleh Negara) Dalam Koridor Fiqh Dengan Mempertimbangkan Realistis Ekonomi”. Jurnal Syariah Vol. II, No.2, October 2014., p. 88.
15 Sri Sudarti, Fiqh Muamalah Kontemporer (Pustaka 2021).
16 Nasrun Haroen (n 5).
17 Rahmani Timorita Yulianti, ‘Pemikiran Ekonomi Islam Abu Yusuf’ (2010) 1 Jurnal Ekonomi dan Perbankan Syariah 15.
18 Nasrun Haroen (n 5).
19 Al-Allamah Abdurrahman Muhammad Khaldun, Mukaddimah (Pustaka Al-Kautsar 2011); Abrar ZYM,
‘Pemikiran Ibnu Khaldun Terhadap Filsafat Hukum Islam’ (2017) 2 Petita : Jurnal Kajian Ilmu Hukum dan Syariah.
20 Al-Allamah Abdurrahman Muhammad Khaldun (n 19).
significant. Prophet Mohamad SAW had been a market supervisor or al-Hisbah, which was later used as a reference for the state’s role in the market. Rasulullah SAW often conducted market inspections to check prices and market mechanisms. This is to guarantee the operation of the market mechanism ideally.21 The Prophet found many dishonest business practices during his market inspections, so he reprimanded him. In addition, the prophet gave many opinions, orders and prohibitions to create an Islamic market. This indicates that al-Hisbah has existed since the time of Rasulullah SAW. Al-Hisbah is an institution whose function is to order goodness so that it becomes a habit and forbids terrible things when it has become an everyday habit. Meanwhile, the purpose of al-Hisbah, according to Ibn Taimiyah, is to order what is called good and prevent what is generally referred to as bad in the area that is the authority of the government to regulate it, adjudicate in other particular general areas, which cannot become accessible to ordinary institutions.22
The government has an essential role in realizing an Islamic market. Government intervention in the market is not only temporary but must be sustainable. The government can be a planner, supervisor, regulator, producer, and consumer for market activities.
Generally, the government’s role in the market can be classified into two parts: positions related to the implementation of Islamic values and morals and dual roles associated with the technical operation of market mechanisms. Price intervention by the government is one policy that is often debated. This is based on the premise that market mechanisms are natural, so market intervention is unnecessary. Most scholars agree on banning government interference in determining market prices because protecting buyers’ interests are as vital as saving sellers. Because protecting both is equally necessary. Conversely, forcing one party to sell or buy at a specific price is unjust. In addition, the assumption that price increases result from seller injustice is not always correct because the forces of demand and supply determine prices.23 Furthermore, to protect the rights of buyers and sellers, price intervention in Islam is permissible and even obliges to do so. Several factors allow price intervention, namely as follows:
a) If the price is not set, the seller sells at a high price, which can harm the buyer.
b) Price intervention to prevent hoarding of goods.
c) Price intervention protects the wider community’s interests because buyers usually represent the wider community, while sellers represent a smaller group.24
Hence, from an Islamic law perspective, price fixing by the government (tas’ir al-Jabari) is not permissible because it limits the freedom of the community to carry out economic activities. However, when conditions in the market can be detrimental to many parties, in this case, the government must resolve existing market problems by setting fair prices to achieve a common good. Then, the government can also implement policies for price stability in the market that considers the rights of sellers and consumers and provides justice to every resident within an area of its authority to achieve a common good.
The Role of Local Government in Protecting Coffee Prices
The local government of Bener Meriah district has issued several policies to protect the price of coffee beans, which is the responsibility of the Department of Trade and the
21 M.Arif Hakim, ‘Peran Pemerintah Dalam Mengawasi Mekanisme Pasar Dalam Perspektif Islam’ (2015) 8 Jurnal Iqtishadia, p. 33.
22 ibid.
23 Sri Sudarti (n 15).
24 Nurasiah Ahmad, ‘Enetapan Harga Oleh Pemerintah Dalam Pandangan Fuqaha’ (2019) IX Jurnal Mau’izhah, p.169-170.
Department of Agriculture. In stabilizing prices and keeping farmers’ coffee prices from dropping, there are several approaches taken by the local government, namely:
1) We are activating the Warehouse Receipt System (WRS) and conducting outreach and training in implementing the WRS system.
2) Conducting regular coaching is an effort facilitated by the government to improve the human resources of farmers by providing training on managing coffee plantations.
This training is focused on how to cultivate coffee plants, such as how to exterminate pests and weeds, and maintenance of coffee plants, such as pruning, planting, how to improve coffee quality, the environment, labour, and wages which are carried out two times a year in one month and carried out per district.
3) We are carrying out rehabilitation programs such as providing coffee seeds and providing organic fertilizers as well as rejuvenation programs, namely replanting coffee plants that are no longer products, such as coffee aged over twenty-five years which has reduced coffee quality.
4) We are training the community about applying organic fertilizers and not giving chemical fertilizers in maintaining good coffee quality to increase coffee prices.
5) Carrying out a collaborative program with coffee plant cooperatives in the Bener Meriah region to campaign for using organic fertilizer instead of chemical fertilizers.
6) Providing information about plant pest organisms by utilizing environmentally friendly materials, called biological control agents by using rice washing water with a bit of sugar and also coconut water, then boiled and fermented for the next few days in spray, and double into Trichoderma which functions to control coffee berry borer pests and can also be used as a root infusion.
7) Supervise distribution or marketing by providing market information assistance by developing a distribution network.25
The local government policy to activate the warehouse receipt system is to protect the coffee beans so that they are correctly maintained and can be re-sold when the coffee price stabilizes. However, unfortunately, this policy did not receive a positive response from farmers because they were charged storage fees in government-owned warehouses.
This warehouse receipt system is financing carried out by regional banks to store coffee bean production so that commodities that are produced and exceed the required limit can be stored for a certain period until prices stabilize again. The benefits of this warehouse receipt are to strengthen the bargaining power of farmers as well as create efficiency in the world of agribusiness. Warehouse receipts can also minimize price fluctuations where farmers can postpone commodity sales after harvest while waiting for prices to improve again, namely by storing their crops in specific warehouses that meet the requirements.
To store coffee commodities in the Warehouse Receipt System (WRS), the entity must have requirements such as having a shelf life that is quite long and at least three months and is contained in Arabica coffee with the first and second-grade levels in the form of green beans and coffee commodities. The approved to be stored in the WRS warehouse of Bener Meriah Regency must have the quality standard.26 The WRS Warehouse in Bener Meriah Regency has a cargo of 1,500 tons of coffee. Therefore, if the number of coffee farmers and the production of coffee commodities in Bener Meriah are equated, the amount stored in WRS warehouses is relatively insufficient, so not all farmers use WRS as a financing alternative to obtain capital or distribute coffee commodities. Furthermore, Edi, as a coffee farmer, stated that managing coffee into green beans takes a long time and
25 ‘Interview with Syafri Riswandi, Head of Department of Trade and Investment Local Government of Bener Meriah District’ (2022).
26 ibid.
Table 1
Coffee Export Data for Bener Meriah Regency 2021
No Exporter Commodities Amount of transac-
tion (USD) 1. CV. GAYO MANDIRI COFFE (GMC) GREEN ARABICA 527.280 2. KOPERASI KOPI WANITA GAYO GREEN ARABICA 989.477 3. KOPERASI PERMATA GAYO GREEN ARABICA 5.624.922 4. KOPERASI PRODUSEN GAYO
ARABIKA MAHKOTA INDONESIA GREEN ARABICA 812.280 5. PT. SUMATERA ARABIKA GAYO GREEN ARABICA 676.023
TOTAL 8.629.982
Data source: Bener Meriah District Trade Office, September 2022
The data above shows that the Permata Gayo cooperative exported the green arabica coffee commodity, reaching USD 5,624,922 of the total exports, which was USD 8,629,982.
According to Arifuddin, the price of coffee in Bener Meriah is highly dependent on international market prices.28 The government’s efforts to counsel farmers to develop organic systems have also not been practical. The data found that 65% of coffee farmers still use chemical fertilizers and chemical pesticides to eradicate weeds. In contrast, only 35% of organic farmers use an organic method to maintain their coffee business. Generally, farmers are reluctant to switch to organic farming because they feel it takes a long time and costs a lot to use the organic method.29
The price of organic coffee on the international market is much higher than coffee treated using chemical fertilizers. The price difference can reach 20 thousand rupiahs per 16 kilograms. Besides that, expensive quality coffee is also obtained if it has an organic certificate, which is an official recognition of the quality of the organic coffee.30 In this case, the role of the government of Bener Meriah Regency has not been entirely successful in protecting coffee prices. This means that the government cannot apply the at-tas’ir al-Jabari concept to achieve price stability. Instead, the government only supervises the marketing of coffee beans in the coffee area. On the other hand, market prices are entirely dependent on market supply and demand, both local and international. In addition, the role of Cooperatives and exporters is very strategic because these parties deal directly with buyers from outside the region, as well as abroad. The cooperatives and exporters also determine the price of coffee at the local level, including the purchase price from farmers.
The Government Intervention in Protecting Coffee Prices in Gayo Highland
Coffee plantation commodity is one of the plantation crops, which is a leading export product in Indonesia. Specifically, this coffee commodity has become the central pillar of the regional economy, so coffee production has become the largest Gross Regional Domestic Product (GRDP) in Bener Meriah Regency. One of its flagship products is Arabica
27 ‘Interview with Edi, Coffee Farmer of Blang Benara Village, Wih Pesam Sub-District on December’
(2022).
28 ‘Interview with Arifuddin, Vice of Permata Gayo Cooperation in Bandar Sub-District on August’
(2022).
29 ‘Interview with Iznal, ICS Gayo Mandiri Coffe, on 25 Agustus’ (2022).
30 ibid.
coffee which is generally exported to various countries, such as Asia, Europe and America.
As previously explained, coffee prices often fluctuate. Therefore, the role and intervention of the government in setting prices by considering the benefits for traders and consumers are significant and essential so that the instability of the coffee price harms no party. The objectives of government intervention in protecting coffee prices are as follows:
1) Guarantee the same price for each individual is realized and avoid hoarding these commodities.
2) Keeping the economy of the people in Gayo Highland well-developed and stable.
3) Supervise so that economic activities that harm the community can be avoided or reduced.
However, some Islamic jurists argue that no one has the right to intervene or fix the price because it is solely the right of God to set the price. The Prophet Muhammad said he did not dare to set prices because it was only Allah’s right. Still, someone could set prices if there was a price increase in the market caused by the actions of irresponsible traders because that could be authoritative over the consumer. Similarly, in the context of Coffee beans prices in the Gayo highland region. According to Syafri, the local governments should not intervene in coffee prices. Instead, the coffee price in the area depends on the perfect market mechanism. That is, prices are formed because of demand and supply and agreements between the two parties, namely between buyers and sellers.31
Besides supply and demand factors, the other main factors causing fluctuating coffee prices are weather conditions, traffic flow, coffee requests from buyers, and the quality of the coffee itself. Bad weather conditions can result in reduced coffee quality. Likewise, if the traffic flow is not smooth, the government, in this case, only controls market prices, not fixing prices. The price of coffee also depends on market mechanisms, where the price depends on demand and supply. If the need for coffee decreases and coffee yields are abundant, the price of coffee will automatically fall. Unfortunately, the government’s role is only to control, not to intervene in fees, so government power cannot control the price of a commodity.
Regarding the government’s efforts and intervention to normalize the price of coffee, the parties consider that the Bener Meriah government does not have the authority to intervene in setting prices because the price of coffee depends on the level of demand and supply of an item. The price of coffee in Bener Meriah depends on market prices, namely the local and international markets. However, the government may intervene in market prices depending on the economic conditions of the people. For example, if one buyer only determines the price of coffee, then there is a drastic reduction that can tyrannize farmers.
So, in a problem like this, the government plays a role in price intervention by finding other buyers so it doesn’t depend on just one buyer. If other buyers experience a decrease in coffee prices, they can switch to other buyers with higher prices. The government also plays a role in controlling agents, cooperatives or other coffee exporters so that no frauds tyrannize the people’s economy.
In addition, the government has the authority to intervene in prices when it occurs of exploitation of coffee princes by such groups. Therefore, government intervention in fair prices is expected to prevent damage. Furthermore, government intervention in protecting coffee prices does not only mean that the government is free to set prices but also depends on the demand for exports abroad because minimal export demand will cause coffee
31 ‘Interview with Syafri Riswandi, Head of Department of Trade and Investment Local Government of Bener Meriah District’ (n 25).
Increase so that the economy of the people of Bener Meriah will surely also increase. The government also cannot intervene in prices because the price of coffee depends on the law of supply and demand and the existing market mechanism. Therefore, if the government views intervention as a benefit, setting a fair coffee price must be a guideline.
Based on the author’s analysis, everything the government does is seen as following the community’s benefit. The Bener Meriah government does not directly set prices. Still, the government also looks at it from the demand and supply side of the market and sees it. Therefore, it can be concluded that government intervention is needed if market manipulations make market conditions unstable or there are acts of traders or certain parties that destroy market mechanisms. Then the government of Bener Meriah Regency is not allowed to intervene in prices in the market mechanism. The efforts made by the government are limited to protecting and monitoring, not interfering in price fixing.
Conclusion
Based on the results of the description above, several conclusions can be summarized, namely: Firstly is the coffee price fluctuations in Bener Meriah significantly affect the community’s economic system because the number of coffee farmers in Bener Meriah reaches 70.09% of the total population. This means that the economy and people’s livelihoods in this district are highly dependent on selling coffee commodities in local, national and international markets. Secondly is government policy in protecting the price of coffee, namely by activating the Warehouse Receipt System (WRS), guiding the form of increasing human resources by providing training on sustainable and environmentally friendly coffee management. In addition to carrying out rehabilitation programs and cooperation programs with coffee cooperatives in the form of counselling, namely reducing the use of chemicals and switching to organic farmers. Then provide socialization about plant disturbing organisms (OPT) and other coffee farmer economic development programs.Thirdly is the district government of Bener Meriah does not intervene in prices in the market mechanism. The efforts made by the government are limited to protecting and monitoring and not interfering in price fixing because coffee prices depend on market prices and supply and demand. However, the government has the right to intervene in prices if there is price exploitation of coffee commodities carried out by a group of people who create unstable market conditions or the actions of traders or certain parties that destroy the market mechanism. However, in this case, the government of Bener Meriah did not provide maximum protection and efforts to increase prices when prices fell. Finally, the authors hope that the Bener Meriah Regency Government can provide more attractive counselling to farmers to switch to becoming organic farmers. Then the government must also form a team that supervises farmers who use chemicals to kill weeds to improve the quality of coffee—in addition to providing training on managing coffee to coffee farmers on cultivating coffee plants, carrying out rehabilitation programs, providing outreach about plant pests (OPT) and making coffee drying houses (dry house) so that when it rains, the people still can dry their coffee.
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