Recipe System (WRS) In Internet Based Agriculture Financing Of Salam
1st Dr. Riris Aishah Prasetyowati, MM Faculty of Economics and Business
UIN Syarif Hidayatullah Jakarta [email protected]
4th Rio Trisasmita Faculty of Economics and Business
UIN Syarif Hidayatullah Jakarta [email protected]
2nd Prof. Dr. Abdul Hamid, MS Faculty of Economics and Business
UIN Syarif Hidayatullah Jakarta [email protected]
5th Muhammad Abdul Ghani Fakih Faculty of Economics and Business
UIN Syarif Hidayatullah Jakarta [email protected]
3rd Dr. M. Arief Mufraini, Lc., M.Si Faculty of Economics and Business UIN Syarif Hidayatullah Jakarta
6th Agnia Nurapifah Faculty of Economics and Business
UIN Syarif Hidayatullah Jakarta [email protected]
Abstract— This study proposes a sharia agricultural financing mechanism with a warehouse receipt system as collateral and uses the internet application for information and data technology and Islamic agricultural financing accounts.
The method used is a flowchart of the farmer greeting financing mechanism for submitting applications. Meanwhile, the method to determine the potential and opportunities uses correlation and regression to obtain the relationship and contribution of each segmentation of agriculture and the use of the internet to agricultural financing. The results show that agricultural segmentation and internet use in villages or agriculture have significant potential and opportunities as financing targets. And the warehouse receipt system has a contribution as a collateral for agricultural financing. The SRG application mechanism in the financing of salam agriculture can be optimized.
Keywords— Salam financing, warehouse receipt system, Village Internet Users, Information technology
I. INTRODUCTION
Currently, Indonesian agriculture can be said to continue to develop. However, if we look deeper, there are still several problems that continue to hinder them, one of which is the reduction in agricultural labor. In 2019, Indonesia lost 0.51%
of its agricultural power, and this year it lost 2.21%. In addition, the problem that hinders agricultural development this year is the lack of seeds for various food crop commodities, both in quality and quantity.
Even though the development of agriculture in Indonesia should be a potential that must be maximized by all parties.
Both by farmers, actors in agriculture, and the government.
One of the supports from the government can be done is by providing guarantees for agricultural productivity through agricultural financing for the welfare of farmers. This is in line with government programs that are currently being promoted, such as business credit, cooperatives, and insurance programs for farmers. This program aims to prevent farmers from selling agricultural products to middlemen who are considered very detrimental.
Government support referred to in this research is the Warehouse Receipt System which is an activity related to issuance, transfer, guarantee, and settlement of warehouse receipt transactions. Where the Warehouse Receipt itself is a documentary proof of ownership of goods stored in the warehouse issued by the Warehouse Manager. The short-term goal of warehouse receipts is that farmers can get access to
financing quickly with low margins, farmers can also use this warehouse receipt facility to get funding, where when prices go down farmers can also delay selling so that farmers can enjoy better prices when the price has started to increase about 2 or 3 months after the harvest is complete.
This study proposes guarantees or collateral with the Warehouse Receipt System on sharia financing that does not use the principle of an interesting contract, such as Murabaha (sale and purchase) contracts, ijarah wa iqtina (leases with the change of ownership), musyarakah mutanaqishah ( capital sharing), and Salaam. Most farmers in Indonesia who are Muslim generally avoid interest-based loans. Because they understand that Islam prohibits the use of interest in transactions. Currently, the agricultural segmentation as a market for agricultural financing has not been optimally utilized by Islamic banking institutions in Indonesia. This can be seen in the table of the composition of sharia financing according to the Sharia Banking Statistics provided by Islamic Commercial Banks (BUS) and Sharia Business Units, as well as Sharia Rural Banks (BPRS) until the end of Mei 2020 in the Salam product line which is a special product for financing for agriculture, as the following:
Table 1. Financing Composition BUS, UUS and BPRS Mei 2020
Financing BUS and UUS (Million
IDR)
BPRS (Million
IDR)
Mudharabah 545.000 271.496
Musharakah 5.409.000 1.242.807
Murabahah 8.551.000 7.742.816
Salam 0 0
Istishna 90.000 70.186
Ijara 482.000 49.224
Qardh 360.000 226.109
Others (multi Purpose Financing)
4.843.000 928.260
T o t a l 20.280.000 10.530.960 Sources : SPS Mei 2020.
According to Cc. Eze and Lemchi et., Al. (2010), Aleem (1990), Malik et al. (1991), Hussain and Demaine (1992), O'Toole, Newman, and Hennessy (2013: 152-176), Agricultural credit has been shown to have a significant impact on the rural economy. . Whereas the agricultural sector proves that the demand for credit during a certain period of time can increase the use of fertilizers, pesticides, superior seeds and agricultural mechanization. Another opinion states that agricultural credit is expected to provide capital for farmers to make new investments or adopt new technologies.
Besides the interest income from the agricultural lands traditionally have a lower yield than the returns from other forms of investment (Marsden et al., 1986, p.270).
The existence of information technology applications in the agricultural sector makes current farmer activities easier, but the distribution of internet in villages has not been maximized, especially to increase agricultural productivity by utilizing information technology. The use of the internet in the village is only limited to communication and information needs among the village community, not yet using it for specific purposes such as using it for agricultural productivity such as financing agricultural needs; procurement of fertilizers, procurement of seeds, procurement of agricultural equipment, farming, and others.
This application to support sharia agricultural financing programs by utilizing the Salam Tani Application in collaboration with the Warehouse Receipt System Guarantee Institution, and startup companies as information technology- based marketing companies in Indonesia. So that the maximum use of information technology in agriculture makes it easier for farmers and more synergized. Therefore, observations were made on the measurement of agricultural product opportunities by utilizing guaranteed warehouse receipts and internet usage in the village.
Based on this background, the main objectives of this study: explain and prove agricultural segmentation and use of the internet in villages as agricultural financing targets, describe the opportunities for the Warehouse Receipt System (SRG) Application for Internet-based Akad Salaam Agricultural Financing and propose a Mechanism and Application of the Warehouse Receipt System application ( SRG) on internet-based agricultural financing.
II. LITERATURE REVIEW
A. Agricultural Development in Indonesia
The livelihoods of the Indonesian people are mostly as farmers, which is why Indonesia is called an agricultural country. But in reality, data from the Central Statistics Agency (BPS) shows a decrease in the absorption of agricultural labor in August 2014 compared to February 2014. In August 2014, the number of agricultural workers was recorded at 38.97 million people, a decrease of 250,000 people or 0.64% compared to February which reached 40.83
million people. Previous data shows that in the 2003-2013 period, there was a decline in the number of agricultural workers, from around 50% previously to only 38% of Indonesians working in this sector in 2013. Despite a decrease in labor absorption, agriculture still contributes significantly to provide employment, namely around 44.3%
of the population. Data from the Central Statistics Agency (BPS) in the announcement of the 2013 economic statistics in Jakarta, shows the contribution of the agricultural sector to gross domestic product (GDP) by 14.4% from the previous year 2012 which was 14.6%. This figure is greater than the contribution of other sectors outside of agriculture. This is because according to BPS data 2013, the greatest economic growth in Indonesia is generated mainly from the two productive sectors that absorb the most labor, namely the agricultural sector and the manufacturing sector. This makes the agricultural sector very strategic for the Indonesian people in improving welfare.
There are five reasons why the agricultural sector has become strategic. First, agriculture is a sector that provides food for the people. Second, agriculture is a provider of raw materials for the industrial sector (agroindustry). Third, agriculture is able to contribute to the country's foreign exchange through exported commodities. Fourth, agriculture is able to provide employment opportunities for rural workers. And fifth, the agricultural sector needs to be maintained for ecosystem balance (environment). Apart from that, BPS statistics show that one of the economic sectors not affected by the economic crisis is the agricultural sector, because in a crisis situation like today, this sector still provides positive growth. The growth in the export value of agricultural commodities experienced a positive growth of 0.22% in 1998. This indicates that the agricultural sector has resilience in facing the problem of stagnating economic growth. Besides having elasticity, the agricultural sector also provides other benefits - which are more primary - during the current economic crisis, namely the potential to escape the burden of imports for people's foodstuffs.
B. Farming Business Credit in Indonesia
Since May 1998 the government has taken several policy improvements. The first policy, is to change and simplify the implementation of FBC (Farming Business Credit) distribution, from the original through five patterns starting from December 2, 1998, which is further simplified to only two patterns. The first pattern, FBC is distributed to cooperatives as executing agents to give FBC (executing agent) to be given to farmers through farmer groups. The second pattern is that FBC is distributed by banks to NGOs as executing agents for FBC (executing agent) to be given to farmers through farmer groups.
In obtaining Farming Business Credit (FBC), one way for farmers to apply for credit to commercial banks. In providing this credit, commercial banks have their own system and tend not to be different from other commercial loans. The mechanism is often called SP-3 (Agricultural Financing Service Scheme) is a credit scheme for financing micro and small businesses engaged in agricultural business (food crops, horticulture, livestock and / or plantations starting from upstream, cultivation and downstream) where in the provision of SP-3 credit the Ministry of Agriculture
provides Credit Risk Reserves (Guarantee) and Guarantee Premium Fees.
Based on Government Regulation no. 83 of 1999 concerning cooperation between the government and commercial banks in the framework of financing agricultural business credit in Article 5 paragraph 1 states that the credit risk or financing risk in the framework of distributing Farmers' Credit is fully borne by the Government. In this case, all risks of non-repayment of loans made by farmers are borne by the government, this makes it easier for small farmers who are included in the poor to continue running their farming businesses without fear of the debt burden from loans if they cannot meet to make repayments.
The problems that arise in the implementation of small- scale Smallholder Farming Business Credit are characterized by several things. First, the narrow area of land controlled by farmers. For example, the average farmer in Java controls land under 0.5 hectares. Objectively, an area of this size cannot be used as the only source of income for farmers.
Second, the location of farmers' land tenure is scattered.
Sometimes farmers control the land in two or several places.
This makes it difficult to cultivate land, determine cropping patterns, apply technology and management. Third, there is still limited mastery of science and technology relating to technical aspects and farm management. Limited mastery of science and technology results not only in suboptimal results but also unprofessional farm management. Fourth, the number of small farmers including cultivators and farm laborers is very large. Data from the 1993 Agricultural Census shows that the number of smallholder households is around 10.9 million households (50.8%) of 21.5 million agricultural households. This percentage continues to increase from year to year. Fifth, individually the production of farmers is also relatively small. so that the resulting profit is also small in terms of both quantity and quality.
Cumulatively, the above characteristics keep the income level of farmers low. This condition makes it difficult for farmers to be able to create savings in the form of money or capital goods such as land. Thus, an injection of capital from outside is needed so that production can continue. However, the 'not promising' characteristics of farmers' businesses make it difficult for them to access bank credit. In other words, farmers' business conditions are included in the business category that is not bankable, because they do not meet the 5C qualifications, namely character, collateral, capacity to repay (ability to repay loans), capital (availability of own capital) and conditions of economy (macroeconomic conditions).
Actually, the government has developed a model of small credit (micro credit) for farmers which is considered capable of overcoming farmers' difficulties, however the complexity of the existing formal credit requirements is the Farming Business Credit (FBC). FBC has many drawbacks even though conceptually the idea is quite good. This weakness is evident in the discrimination in its designation, the length of the procedure for obtaining it, the unpreparedness of the infrastructure and the bias of human resources who are credit providers. Discrimination in the designation of FBC cannot be separated from government policies contained in the Bimas Intensification program. In
Article 17 paragraph 1 Decree of the Minister of Agriculture No. 9 / SK / Mentan / Bimas / XI / 96 stated that, "Farmers participating in the Agricultural Intensification Bimas program need additional capital in order to be able to apply the recommended technology provided by the General Pattern FBC and Special Pattern FBC for intensification of rice, secondary crops and horticulture." This means that FBC is more aimed at farmers participating in the BIMAS intensification program for rice, secondary crops and horticulture. As a consequence, it is difficult for farmers who are not included in the Bimas program to access FBC. Even though the number of non-Bimas farmers is greater than the farmers participating in Bimas.
When examined further, this FBC facility is inseparable from the grand strategy of achieving food self-sufficiency launched by the government. At a certain level, the existence of FBC is synonymous with the introduction of green revolution technology, irrigation development, extension packages and so on, which are built integrally to achieve food self-sufficiency. Thus, its procurement orientation prioritizes the "national interest" of food sufficiency rather than taking sides to defend and improve the welfare of farmers. Indeed, for non-Bimas small farmers the government also provides various credits such as rural general credit, credit to primary cooperatives for its members, mini-credit, and small investment credit / permanent working capital credit.
However, looking at the requirements for obtaining credit and the procedure for credit, it is not effective for smallholders to access them.
From the journey of the KUT since the beginning of the Reformation era, formulating and implementing financing for the agricultural sector is indeed not easy, because apart from institutional problems, the transaction costs it incurs, and the possibility of moral hazards and abuse of authority is quite large. Psychologically, if there is a perception among farmer (and non-farmer) debtors that credit for the agricultural sector will be whitened, then it will be very difficult for any financial institution to design and formulate agricultural sector financing policies. The next consequence is that the target of increasing agricultural production and productivity will be difficult to achieve, so that efforts to increase farmers' welfare will be hampered.
C. Agricultural Financing in Islamic Banking and Financial Institutions
Credit facilities, both from the formal and informal sectors, farmers face various obstacles, including the lack of collateral in the form of fixed assets such as land and buildings, complicated bureaucracy and administration, lack of bank experience in serving rural areas, high borrowing costs from the sector. informal, high level of risk associated with small entrepreneurs / producers, the dependence of the formal sector on government capabilities. Agricultural financing that has occurred since the beginning of the reform era has become an accumulation of all kinds of cases of arrears of credit and is the largest contribution of bad credit from the agricultural sector, so that these lessons and experiences have resulted in doubts and no hope for the Islamic banking financial sector to be able to immediately formulate, design and implement financing policies agricultural sector.
In addition to the possibility of moral hazards, high transaction costs, and considerable abuse of power, it is feared that this will become the next institutional problem. As a result, the target of increasing agricultural production and productivity is difficult to achieve, so that efforts to improve farmer welfare are constrained. Likewise, the target of increasing the growth of the Islamic banking financial industry will also find it difficult to achieve total assets exceeding 5% to catch up with the growth of the conventional financial and banking industry, if it continues to doubt and ignore the agricultural segmentation which should be a new source of financing for Islamic financial institutions and banking in Indonesia.
D. The concept of Bai Salam as Agricultural Financing Model
Bai Salam is a form of sale and purchase with an upfront payment and delivery of goods at a later date (advanced payment or forward buying or future sales) with a clear price, specifications, quantity, quality, date and place of delivery, and agreed upon in the agreement. According to Usmani (1998, p.186), the basic objective of the Bai Salam sale and purchase contract is to meet the needs of small farmers to plant their farms and feed their families until harvest time arrives.
Bai salam is beneficial for sellers (farmers) because they receive an advance payment. Bai salam is also beneficial for buyers because in general the price with the salam contract is cheaper than the price with a cash contract. The risk to the goods being traded is still with the seller until the time of delivery of the goods. The buyer has the right to examine and can reject the goods to be delivered if they do not comply with the initial specifications agreed upon.
Buyers can ask the seller (farmer) to complete collateral in the form of a mortgage, dependence or self-guarantee in order to reduce the risk of financing. So that the seller through this guarantee agreement transfers the risk of fluctuation to the buyer. Meanwhile, the buyer transfers his business risk to the seller (farmer) by guaranteeing his agricultural products in quantity and quality at the specified time and place.
The Bai Salam contract can be considered as an alternative agricultural financing model specifically for Muslim farmers who live far from Islamic financial institutions, or Muslim farmers who do not like credit with an interest element, or even Muslim farmers who avoid and are not compatible with the credit installment system, and cash needs agricultural flow (Houtman, 2006).
The Bai Salam contract is a credit sale and purchase agreement over a loan. Additional benefits for agricultural
financing when compared to other Islamic financing models such as Profit and Loss sharing (PLS) and Bai Muajjal (Credit sales / deferred). The PLS concept requires a lot of work in determining an appropriate and achievable PLS ratio.
Likewise, Bai Muajjal who is the opposite of Bai Salam.
Where the availability of crops is purchased at this time while payments are made by farmers at a future date.
Bai Salam provides cash when needed (for example: at the time of nursery, or fertilization, or at the time before harvest). The Bai Salam contract fully follows the modern Islamic banking financing mechanism.
The only concern in this Bai Salam contract is that Islamic banks prefer to deal with money rather than commodities.
This problem can be resolved through a parallel Salam contract, which is to carry out two bai as-salam transactions between the bank and the customer, and between the bank and the supplier or other third party simultaneously (Bahrain:
Accounting and Auditing Organization for Islamic financial Institution (AAOIFI) Manama. , 1999, p. 242).
According to Antonio (2001, p.110) that the Sharia Supervisory Board of Rajhi Banking & Investment Corporation has stipulated a fatwa that allows parallel salam practices provided that the implementation of the second salam transaction does not depend on the implementation of the first salam contract. Meanwhile, some contemporary scholars provide notes on parallel salam transactions, especially if such trade and transactions are carried out continuously. This is thought to lead to usury (Ziauddin, 1985).
D. Warehouse Receipt System (WRS) in Islamic Financial Institutions
The Warehouse Receipt System (WRS), which is currently only chaired by the Commodity Futures Trading Supervisory Agency, is expected to be one way out that may be useful in formulating an effective future agricultural financing scheme for Islamic financial institutions and banking. Warehouse Receipt System is an activity related to the issuance, transfer, guarantee, and settlement of warehouse receipt transactions. Warehouse Receipt itself is a documentary proof of ownership of goods stored in the warehouse issued by the Warehouse Manager. The short- term goal of warehouse receipts is that farmers can get access to credit quickly at low interest rates, farmers can also use this warehouse receipt facility to get funding, where when prices drop, farmers can also delay selling so that farmers can enjoy better prices when the price has started to increase about 2 or 3 months after the harvest is complete. In the long term, farmers can produce high quality, standardized agricultural products. It is also hoped that farmers will be more prosperous and become entrepreneur farmers.
The steps that need to be considered in implementing the Warehouse Receipt System according to Prof. Dr.
Bustanul Arifin (2012), are: First, improving communication between the banking sector (and other financial institutions, including those based on sharia) with the agricultural sector.
This is to overcome misunderstanding (misunderstanding) between the two sectors. With improved communication and friendlier information packaging, it is hoped that Islamic banking and banking will no longer regard agriculture as a
poor and high-risk sector. Likewise, agriculture no longer considers banking or Islamic banking as an elite sector, does not care about the character of farmers, doubts farming and neglects the agricultural sector in general.
Second, improvement of banking products that are more innovative in financing the agricultural sector, especially in Islamic financial and banking institutions that have unique products based on contracts that are in accordance with customer needs while sticking to the Al-Qur'an and Hadists.
So that every problem in agricultural financing can be minimized in sharia. Sharia banking is expected to be more courageous in embracing the Warehouse Receipt System (SRG) which can be more compatible with the commodity futures market (futures trading) which is characteristic of developed industrial countries. Conventional and sharia warehouse receipt financing is only different from the contract side. For sharia warehouse receipts, the contracts used can be in the form of musyarakah (partial capital from the bank, some customers), mudharabah (capital only from the bank), and murabahah (the principle of sale and purchase, the bank sets the margin). In the conventional way, the provision of credit is followed by the obligation to pay interest.
Third, the improvement of protection schemes in the agricultural sector, including empowering farmers to overcome capital constraints they face. So real steps are needed to encourage and develop Islamic financial and banking institutions that have a more diverse financing model based on categories a) Sharia based is a financing model adopted by Islamic Financial Institutions (IFIs) which is a transaction based on sharia based on profit and loss sharing, and b) Sharia Compliance, namely a financing product model that determines and determines profit returns based on sharia constraints. By elaborating sharia banking products with the Warehouse Receipt System, this will be very useful in overcoming the risks of Islamic agricultural financing through prudential banking principles which are still considered so that agricultural financing as the real economic activity of the community continues and is controlled, while helping to release the burden on farmers. in his farming business.
Institutional Warehouse Receipt System Institutional regulated in Chapter III of the SRG Law which consists of 7 parts and includes 16 articles. Islamic banks in this institution can choose a position or act as; 1) Warehouse Managers, according to Article 1 paragraph 8 of the SRG Law, warehouse managers are parties who carry out warehousing businesses, both self-owned and other people's warehouses, who carry out storage, maintenance and control of goods stored by the owner of the goods and have the right to issue Warehouse Receipts . 2) Conformity Assessment Agency is an accredited institution that carries out a series of activities to assess or prove that certain requirements related to products, processes, systems, and / or personnel are met. 3) Registration Center, which can carry out activities as a Registration Center, is an incorporated business entity. law and obtain the approval of the Supervisory Agency (Article 34 paragraph (1) of the SRG Law). The legal entity that has been approved by Bappebti to act as a registration center is PT. Indonesian Derivatives Clearing House (PT. KBI) which
received approval based on Decree Number 03 / BAPPEBTI / Kep-SRG / SP / PUSREG / 6/2009 dated June 16, 2009.
Except for the Supervisory Agency, Islamic banks cannot occupy a position or act as a Supervisory Body. Because the Warehouse Receipt Supervisory Agency is an organizational unit under the Minister, which is given the authority to carry out guidance, regulation, and supervision of activities related to the Warehouse Receipt System. This agency, among other things, has the authority to grant approval as Warehouse Manager, Conformity Assessment Agency and Registration Center. This agency also provides approval for banks, non- bank financial institutions and Futures Traders as issuers of Warehouse Receipt Derivatives. The Supervisory Body is also authorized to carry out an examination of any approved party if they are suspected of committing a violation. Before the Agency responsible to the Minister was formed, its duties, functions and authorities were carried out by the Commodity Futures Trading Supervisory Agency which was formed based on Law No. 32/1997 concerning Commodity Futures Trading.
Subsidies, attention, concern and partisanship of the government in the distribution of Islamic banking agricultural financing is protection for both sectors, namely the agricultural sector and the banking sector. If the government is able to provide regulations on Islamic agricultural financing instruments with this warehouse receipt system, this sharia banking product will be easily absorbed so that it becomes a strategic step in increasing the growth of Islamic banking. The warehouse receipt system is also expected to be able to increase the portion of banking financing to the agricultural sector by making agricultural commodities a safe guarantee for banks. because agricultural and plantation financing is a large real sector and this market has not been fully controlled by Islamic banking. In addition, in the agricultural sector, warehouse receipt systems can increase farmers' income and stabilize market prices throughout the year by allowing farmers to extend the sale period of their crops throughout the year. This is expected to have an impact on the rapid growth of the real sector, as well as the achievement of an increase in agricultural production and productivity and increase the welfare of farmers. In the future, this warehouse receipt system can strengthen the commodity futures market network as a means of sharia agricultural commodity hedging.
According to Budd (2001), wheat warehouse receipts were first used in Mesopotamia in 2400 BC and the first form of paper money used in England was negotiable silver warehouse receipts. The use of SRG is often associated with structured financing transactions, which ensures that if the transaction goes on normally then the lender is automatically replaced (i.e. the loan itself is liquidated), and if the wrong lender has guarantees for collateral that can be liquidated with minimum difficulty, so as to help increase trade in agricultural commodities in Africa.
Coulter and Onumah (2002) define a warehouse receipt system (SRG) as documents issued by warehouse operators as evidence that certain commodities, of the stated quantity and quality, have been stored in a specific location by named depositors. Depositors can be producers, farmer groups, traders, exporters, processors, or even any individual or
corporate body. Warehouse operators hold commodities stored in a safe storage manner; implies he is legally responsible for making up any value lost due to theft or damage by fire and other calamities but has no legal interest or benefit in it. However, in the case of liquidation, the warehouse operator's creditors will not be able to find recourse to the commodity held as permanent property with the depositor or receipt holder. The only exception is the warehouse operator lien which covers an extraordinary storage fee.
Warehouse receipts can be used as collateral (Vasiljević and Zakić, 2006) to obtain short-term loans, which usually have a lower interest rate than other short-term loans (Scheme 1). Warehouse receipts can be sold and will usually result in a higher price than the same product sold with other proof of storage (Back et al., 2013).
Figure 1. Financing Model with Warehouse Receipt System
In addition to being a traditional loan guarantees for short-term gain, the warehouse receipt can also be used for repurchase agreements. A buyback agreement is an agreement to sell securities with a commitment to buy back them at a certain period and at a fixed price (Mirović and Bolesnikov, 2013). The warehouse receipt seller (farmer) agrees to buy back from the buyer (bank) within a predetermined period and price.
The benefits of warehouse receipts include better prices for goods stored in public warehouses, and receipt of storage receipts as collateral by commercial banks is the result of trust in the system owned by banks and merchants (Kannapiran, 2000). This belief is derived from the so-called "three rounds of safety" built into the warehouse receipt system (SRG), namely :
1) Only first-class warehouses with suitable financial indicators and instruments can be licensed.
2) Special inspection service of the Ministry of Agriculture to monitor goods stored in public warehouses.
3) Compensation funds if the owner of the goods cannot get their products stored in a public warehouse with a period of compensation for the owner's losses within five days through out of court procedures.
One of the cornerstones of the public warehouse receipt system is the fact that the Indemnity Fund has a separate fund for the purpose of compensating owners of various types of products.
Subsidies aimed at reducing the loan interest rate on warehouse receipts were also an important element, especially during the first years of system formation (Vasiljevic and Zakic, 2006). In his research based on the experience of Serbia and Bulgaria, this approach can help a
bank to gain trust in warehouse receipts as collateral. The EBRD supports three banks in Serbia to loan against warehouse receipts with 50 million EUR during the risk sharing program. Subsidizing the cost of storing public warehouses, especially in the early stages, is another important support element, as the subsidies must be higher for a better quality product.
III. METHOD OF RESEARCH
A. Data and sample
The type of data used in this study is secondary data with daily monthly data for 10 years 2009 – 2019 period.
Data processing used in this study is using Microsoft Excel and EViews 9. Data analysis methods used are time series analysis, stationery and non-stationery, and Autoregressive Integrated Moving Average (ARIMA).
B. Time Series Analysis
Time Series analysis is an analysis method that is intended to make an estimate or forecast in the future. Time Series Analysis can be classified into two, namely Short- Term Analysis and Long-Term Analysis.
C. Stationary and Non-stationary
The important thing related to research that uses time series data is stationery. This test is very important so that there is no apparent regression if the data is not stationary.
Time series data is said to be stationary if the data is shows a constant pattern over time, meaning that there is no growth or decline in data.
What should be noted is that most periodic series are non-stationary and that the AR and MA aspects of the ARIMA model only concern stationary periodic series.
Stationary means there is no growth or decline in data. The data should be roughly horizontal along the time axis. In other words, data fluctuations are around a constant average value, independent of time and the variance of these fluctuations remains substantially constant over time.
A time series that is not stationary must be converted into stationary data by doing differencing. What is meant by differencing is calculating the change or difference in the observed value. The difference value obtained is checked again whether it is stationary or not. If it is not stationary then differencing is done again. If the variance is not stationary, a logarithmic transformation is performed.
D. Forecasting Using the ARIMA Model
Autoregressive Integrated Moving Average (ARIMA) models introduced by George Box and Gwilym Jenkis (1976) with the ARIMA process which is applied for periodic series analysis, forecasting, and control. An ARIMA (3,5) (5,3)12 model as an example, is described as follows:
(1- B) (1 – B12) Xt = ( 1 - ˗θt B) (1 – θ1B12) et ……..(1) However, in order to use a defined model for forecasting, it is necessary to develop these equations and make them more similar to equations ordinary regression. For the model above, the shape is
Xt = Xt-1 + Xt-12 – Xt-13 + et – θi et-1 - ᵩ1 et-11 + θ1ᵩet-13
….(2)
In order to be able to use this equation to predict the next 1 period, i.e. Xt + 1 we add one number to the indicating, like so:
Xt+1 = Xt + Xt-11 - Xt-12 + et+1 – θi et - ᵩ1 et-11 + θ1ᵩet- 12 ….(3)
The value of et +1 will not be known, because the expected value for future random errors must be set to zero.
However, from a customized model (fitted model) we may change the values et , et-11, et-12 with their values determined empirically, that is, as obtained after the last iteration of the Marquardt algorithm.
Of course, if we predict far in the future, we will not get an empirical value for “e” For X values, at the beginning of the forecasting process, we will know the values of Xt, Xt11, and Xt-12. After a while, however, the X value in equation (3) will be forecasted value, not known past values.
IV. RESULT AND DISCUSSION
The Salam Tani concept is designed to facilitate farmers in obtaining financing from Islamic Banking. With the presence of this application, it is hoped that it can increase the amount of financing with the salam contract in Islamic Banking. In addition, this application will later be able to help product marketing through a guarantor. The Salam Tani application acts as an intermediary between farmers, banks and guarantor. The role of the guarantor is here to guarantee that farmers can get financing. To get financing, farmers sell their crops through this application. By utilizing the Warehouse Receipt System, the harvest from these farmers can be used as an underlying asset for financing applications.
To be able to apply for financing with this salam contract,
farmers must first register on the Salam Tani application.
After filling out the registration, the farmer will get an account in the Salam Tani application. After that farmers can apply for financing through this application which is integrated with Islamic banking institutions throughout Indonesia.
Table Data 2009-2017
Based on real data for 2009 - 2017 the growth of horticultural agriculture, plantations and food crops has decreased in the horticulture and plantation sectors, while for food crops it has experienced significant growth. Meanwhile, the growth of internet users in Indonesia and the distribution of agricultural credit has developed from year to year. This proves that in the future the potential for internet users and lending is large enough to develop, for that it is necessary to increase and expand agricultural land so that agricultural productivity in Indonesia can meet domestic needs considering that there are more internet users or potential consumers and also the amount of credit distribution is getting higher.
Table Forecasting Data 2018-2025
Forecasting from data taken in 2009-2017 illustrates the estimated data for 2018-2025 can be seen in the table above.
The development of the horticultural sector is estimated to experience a decline around 2022. This can mean that if agricultural development only relies on imports from other countries, in the future agricultural growth in Indonesia will decline and minus, while internet users (population) and credit distribution will continue to grow. . There needs to be serious actions to help the Indonesian agricultural sector to continue running in Indonesia. For this reason, optimizing financing for farmers is expected to be able to break and encourage agricultural development in Indonesia.
Year
Horticulture (Ha)
Plantation
(Ha) Crops (Ha)
Internet User (Million)
Agricultural Credit Distribution
(Billion)
2009 2.216.655 32.141.729 32.920.964 16,463 77.412
2010 1.677.780 26.258.578 32.436.426 26,356 90.999
2011 1.732.590 27.281.980 33.093.822 44,118 109.790
2012 1.765.589 28.051.316 33.528.794 63,000 109.790
2013 1.780.329 28.655.150 33.971.534 71,200 177.162
2014 1.634.173 28.859.135 33.914.924 62,190 212.386
2015 723.115 28.736.508 34.411.603 67,515 254.954
2016 846.823 25.161.349 36.940.336 72,841 283.827
2017 811.774 23.230.836 38.773.165 78,166 317.373
Tahun
Hortikultura (Ha)
Perkebunan (Ha)
Tanaman Pangan (Ha)
Pengguna Internet (Juta)
Penyaluran Kredit (Miliar)
2018 659.465 23.147.974 36.919.895 99,465 324.890
2019 420.752 22.305.415 37.522.722 106,275 369.035
2020 245.832 21.084.593 38.144.472 112,198 402.983
2021 142.845 20.032.579 38.748.502 118,525 437.253
2022 -11.156,18 19.249.485 39.336.433 125,628 462.998
2023 -210.279,20 18.580.218 39.927.920 133,054 496.441
2024 -410.377,10 17.785.442 40.529.045 140,279 529.391
2025 -562.315,60 16.858.751 41.131.715 147,184 566.368
Regression 2009-2017
Observation results on real data in the 2009-2017 period showed a significant result of 0.00772 ≤ 0.05. Meanwhile, the 3 agricultural sector variables and the Internet User variable are also significant with financing. However, the horticulture sector has a significant inversely proportional to the decline in horticulture development.
Forecasting Regression Data
The results of regression observations on forecasting data from 2018-2025 show insignificant results of 6,00015 ≥ 0.05.
And the dependent variable also has less significance results on the dependent variable. This result can occur because Indonesia does not take full advantage of Islamic financing and the result is that the development of agriculture in Indonesia is decreasing day by day. This is also influenced by other factors such as import activities that are more dominant than the use of local agriculture to meet the daily needs of the Indonesian people, government policies, and so on.
V.CONCLUSION
Proved that agriculture and the use of internet segmentation villages have the potential and opportunity is very significant as a target of Islamic-based agricultural finance. Shows that the application opportunities with the SRG on greeting financing targets are not optimally utilized.
Due to the high risk of agricultural financing, farmers' lack of access to conventional and sharia financial institutions, and burdensome financing requirements for farmers, such as:
ownership of collateral. The mechanism and application of the SRG in financing can be applied referring to the existing potentials and opportunities where currently the opportunities and potentials of each agricultural sector are not optimized, such as: horticulture, food crops and plantations.
REFERENCES
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Journal of Financial Services Marketing.
[2] Alsadek H. Gait and Andrew C. Worthington. (2007). A Primer on Islamic Finance: Definitions, Sources, Principles and Methods.
University of Wollongong Research Online.
[3] Alsadek H. Gait and Andrew C. Worthington. (2007). An Empirical Survey of Individual Consumer, Business Firm and Financial Institution Attitudes towards Islamic Methods of Finance. University of Wollongong.
[4] Ariff, M. (2014). Whither Islamic Banking? The World Economy . [5] Hanif, M. (2011). Differences and Similarities in Islamic and
Conventional Banking . International Journal of Business and Social Science .
[6] KHAN, M. K. (1992). Principles Of Islamic Financing . Islamic Research And Training Institute .
[7] Kinyanjui, S. N. (2013). Challenges Facing the Development of Islamic Banking. Lessons from the Kenyan Experience . European Journal of Business and Management .
[8] M. Shahid Ebrahim and Shafiqur Rahman. (2005). On the pareto- optimality of futures contracts over Islamic forward contracts:
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Regression Statistics Multiple R
0,9738 42579 R Square
0,9483 69368 Adjusted R
Square
0,8967 38736 Standard Error
28878, 41478 Observations 9
ANOVA
df SS MS F
Signific ance F
Regression 4
612740 75859
153185 18965
18,368 34716
0,00772 1901
Residual 4
333585 1361
833962 840,2
Total 8
646099
27220
Coeffici ents
Standar
d Error t Stat P-value Lower
95%
Upper 95%
Lower 95,0%
Upper 95,0%
Intercept
- 732972 ,403
416571, 7814
- 1,75953 4457
0,1533 0009
- 188956 1,087
423616 ,2804
- 188956 1,087
423616 ,2804 Hortikultura
(Ha)
- 0,0812 0747
0,03316 2099
- 2,44880 3695
0,0705 36086
- 0,17328 0216
0,0108 65277
- 0,17328 0216
0,0108 65277 Perkebunan
(Ha)
0,0078 35939
0,00600 0863
1,30580 2041
0,2616 54497
- 0,00882 5127
0,0244 97005
- 0,00882 5127
0,0244 97005 Tanaman
Pangan (Ha) 0,0221
30474 0,00916
0241 2,41592
6951 0,0730
8436 - 0,00330 2433
0,0475 63381
- 0,00330 2433
0,0475 63381 Pengguna
Internet (Juta) 986,25
63948 705,208
9386 1,39853
0763 0,2345
07597 - 971,717 5109
2944,2 30301
- 971,717 5109
2944,2 30301
Regression Statistics Multiple R
0,99958 3751 R Square
0,99916 7675 Adjusted R Square
0,99805 7909 Standard
Error
3600,94 0248 Observations 8 ANOVA
df SS MS F
Signific ance F
Regression 4
466980 30241
116745 07560
900,34 04051
6,00015 E-05
Residual 3
389003 12,02
129667 70,67
Total 7
467369
30553
Coeffici ents
Standar
d Error t Stat P-value Lower
95%
Upper 95%
Lower 95,0%
Upper 95,0%
Intercept
148602 5,377
147112 92,85
0,10101 2562
0,9259 12997
- 453318 74,21
483039 24,96
- 453318 74,21
483039 24,96 Hortikultura
(Ha)
- 0,10661 4483
0,07403 792
- 1,43999 8347
0,2454 9055
- 0,34223 6188
0,1290 07223
- 0,34223 6188
0,1290 07223 Perkebunan
(Ha)
- 0,02127 6859
0,09129 0191
- 0,23306 8408
0,8307 05245
- 0,31180 2991
0,2692 49272
- 0,31180 2991
0,2692 49272 Tanaman
Pangan (Ha) - 0,01925 8529
0,39873 645
- 0,04829 8892
0,9645 13626
- 1,28821 5872
1,2496 98814
- 1,28821 5872
1,2496 98814 Pengguna
Internet (Juta) 1148,06
61 21758,4
9032 0,05276
4051 0,9612
36848 - 68097,1 6104
70393, 29324
- 68097,1 6104
70393, 29324
