TX_1~AT/TX_2~AT International Journal of Economics and Financial Issues ISSN: 2146-4138 available at http: www.econjournals.com International Journal of Economics and Financial Issues, 2021, 11(3), 64-71. International Journal of Economics and Financial Issues | Vol 11 • Issue 3 • 202164 Analysis the Effect of Coconut Production Risk and Price on the Economic Behavior of Coconut Farmers in Seruyan District, Central Borneo Province, Indonesia Rusdi1*, Harianto2, Sri Hartoyo3, Tanti Novianti3 1Departmen of Accounting, Faculty of Economics, Pamulang University, Jl. Surya Kencana No.1, Kota Tangerang Selatan, Banten, Indonesia, 2Department of Agribusiness, Faculty of Economics and Management, IPB University, Indonesia, 3Department of Economics, Faculty of Economics and Management, IPB University, Indonesia. *Email: rusdi.msi@gmail.com Received: 19 Febraury 2021 Accepted: 26 April 2021 DOI: https://doi.org/10.32479/ijefi.11340 ABSTRACT Coconut farmers are always faced with risks, including the risk of production and price risk. This production risk causes the productivity of the head to decline. In addition, the price risk faced by farmers will also have an impact on the income received so that in the end it will affect the farmer household decision making in allocating existing resources. The purpose of this study was to analyze the effect of changes in the level of production risk and price on farmer household behavior in coconut farming production decisions. This research was conducted in Seruyan District, Central Borneo Province with 200 farmers as respondents. The results showed that there was a risk that production would increase the use of herbicides, reduce the allocation of time to use male labor in the family on family farms and increase the use of male labor from outside the family and reduce spending on health, education and household savings. Meanwhile, the price risk will result in reduced use of female labor from outside the family, reduced non- food, education expenditure and reduced business investment. Keywords: Coconut Farmer Household Economic Behavior, Production Risk, Price Risk JEL Classifications: D10, D13, D14, Q12 1. INTRODUCTION Coconut farmers are always faced with risks, including the risk of production and price risk. Indications of the existence of production risk and prices are shown by the ups and downs of production and the prices received by coconut farmers every season. The existence of this production risk causes the productivity of the head to decrease. As for coconut production, as a whole, the production of coconut plantations in the District of Seruyan in 2013 was 3360.2 tonnes/year and in 2014 it was 974.38 tonnes/year (BPS Seruyan, 2017). The main sources of risk that are generally felt by farmers include uncertainty of weather, pests and diseases and uncertainty of product prices (Patrick et al., 1985). There are several risks faced by coconut farmers that often arise, namely the uncertainty of coconut prices. The risk of product prices causes the price obtained by coconut farmer households to fluctuate. The product price risk is largely determined by the strength of demand and coconut retention in the market. Based on observations in the field of coconut prices in February 2019, it was 1500/coconut. Even at the end of 2018 the price of coconut reached 800/coconut. This condition will result in a decrease in coconut peni household income. In addition to on-farm farming activities, coconut farmers allocate labor from their family members to activities outside of off-farm farming and outside non-farm farming, with these activities, coconut farmers household income will be used for daily consumption. With this production and price risk, it will affect the This Journal is licensed under a Creative Commons Attribution 4.0 International License Rusdi, et al.: Analysis the Effect of Coconut Production Risk and Price on the Economic Behavior of Coconut Farmers in Seruyan District, Central Borneo Province, Indonesia International Journal of Economics and Financial Issues | Vol 11 • Issue 3 • 2021 65 economic behavior of coconut farmer households both in making decisions on production, consumption and allocation of labor. Nakajima (1986) states that one of the important aspects in assessing the agricultural sector in developing countries is the characteristics of the farm household as an interrelated economic unit. Public policies directed at farmers or farms certainly need to pay attention to the behavior of these farmers’ decision-making, so that the policies taken can achieve their goals effectively and efficiently. Various research results indicate that the existence of production and price risks will have an impact on decreasing production and household income. So that in the end it will affect the farmer household decision making in allocating existing resources (Ellis, 1988; Harwood et al., 1999 Fariyanti et al., 2007; Hartoyo et al., 2004; Jufri et al., 2018). Therefore, it is important to conduct research on household economic behavior due to the risk of production and prices in coconut farming. So that the purpose of this study is to analyze the effect of production risk and price on coconut farmer household economic performance and the factors that affect production, use of labor, and household expenditure. 2. LITERATURE REVIEW In the research of Beach et al. (2008) formulated the elements of production risk and product price risk in the model of farmer household economic behavior. In which it assumes the Present Value of utility expectations with constraints of time, production function and budget. Farm households have the following objective functions: ( )-rtMax e EU t dt∫ (1) If production and prices are stochastic, then household utility will depend on expectations and variance in the consumption level (C), the availability of leisure time (Tl) and the characteristics of the farmer household (Zh) as follows: EU=U(E (C), Var (C), Tl; Zh) (2) Assumed dan U U > 0 å £ (C) V 0 ar (C) ∂ ∂ ∂ ∂ . If the farmer household allocates labor resources in the family and the cultivated land it owns to manage the farm in producing a commodity by combining output for each period, the constraints are as follows: 1. Time constraints: T=Tf+To+Tl, To≥0 (3) 2. Production function: Q=Q(N, Tf, Lf, X, ε) (4) 3. Budget constraints: pq Q+wo To+Y=px X+wh Hf+pn N+pc C (5) Where T is the total time for the household, Tf is the time for the household to work on the farm, To is the time for the household to work outside the farm, Tl is the time for the household to relax (leisure), Q is the output, N is the area of land, Lf is the labor rent, Xi is the input of production, ε is the risk, pq is the price of output, pc is the price of consumer goods, wo is the wage of non-farm labor, px is the input price, wh is the wage of rented labor, pn is the price of land, Y is income not from work, and C is a consumer good. Production and prices are assumed to be sources of uncertainty, farmers often experience uncertainty in production prices when making decisions on production activities. The risk that is often faced by farmer households in cultivating farming is the risk of production, this appears due to weather, pests and plant diseases. If it is assumed that there is no joint product, the production function is as follows: Qi=Qi (Ni, Tfi, Lfi, Xi, εi) (6) In this research, the commodity under study is coconut, this commodity is the most dominant commodity cultivated by farmer households in the district of the district, the sub-district of the Lower East, East Borneo, Central Borneo. If it is assumed that the uncertainty of production is a multiplication, then the production function is as follows: Qi=εi Qi (Ni, Tfi, Lfi, Xi) (7) Where are the expectations E(εi)=μ; variance var (εi)=σi 2 (8) Furthermore, with the production function shown in equation (4), the current period profit function for coconut farming activities is written as follows: π=∑i (pqi εi Qi (•)–wf Tfi–wh Lfi–px Xi–pn N) (9) In this case wf shows the time value used by the farmer household in coconut farming. Given the production risk and price defined as E (Pi) = θi and the price variance as var (Pi) = φi2, the expected profit can be written as follows: E(π)=∑[θi μi Qi (•)–wf Tfi–wh Lfi–pxXi–pn N] (10) The expected profit variance can be written as follows ( )2 2 2 2 2 2 21 i i i i i ii Q • (Var( ) )= + +ϕ σ ϕ µ θ σπ ∑ (11) Furthermore, the Lagrangian function of the model can be written as follows: L ≡ U(E(C), Var (C), Tl; Zh) λ [θi μi Q(N, Tf, Lf, X)–px X–pn N–wh Lf +wo To+V–pc C]+τ [T–Tf–To–Tl]+μTo (12) When the conditions are optimal, the function of demand for input and supply of output can be derived by applying the Kuhn Tucker condition, which is as follows: Rusdi, et al.: Analysis the Effect of Coconut Production Risk and Price on the Economic Behavior of Coconut Farmers in Seruyan District, Central Borneo Province, Indonesia International Journal of Economics and Financial Issues | Vol 11 • Issue 3 • 202166 Ni=Ni (θi, φi 2, μi 2, σi 2, wh, px, wo, At–1, Zh) (13) Tfi=Tfi (θi, φi 2, μi 2, σi 2, wh, px, wo, At–1, Zh) (14) To=To (θi, φi 2, μi 2, σi 2, wh, px, wo, At–1, Zh) (15) Lf=Lf (θi, φi 2, μi 2, σi 2, wh, px, wo, At–1, Zh) (16) The function of input demand includes production for land area (Ni), labor for coconut farming (TF), labor outside coconut farming (To), labor hired for coconut farming (Lf) and other variable inputs such as fertilizers and pesticides. Thus, the demand function on the expected goods consumed (C) is influenced by the variables mentioned above, non-work income (V) and the price of consumer goods (pc). 3. METHODS This research was conducted in Seruyan Regency, Central Borneo Province purposively with the consideration that Seruyan Regency is one of the main coconut producing districts in Central Borneo Province. The data used in this study are primary data and secondary data. Primary data is cross section data for the 2019 planting season. Data was obtained by conducting direct interviews with 200 coconut farmer households using a questionnaire prepared by the researcher. Meanwhile, secondary data was obtained from several related agencies, such as the Ministry of Agriculture, the Central Bureau of Statistics and other sources. This data is used to support the analysis in this study. Coconut Farmer Household Economic Model 1. Production PROD=a0+a1*PUGM+a2*HBSA+a3*JBKP+a4*TPDK+a5*T WDK+a6*TTLK+a7*LUTK+a8*SDPK+E1 (17) 2. Input Usage PUGM=b0+b1*JBKP+b2*HUGM+b3*UMPK+b4*TBUK+b5 *SDPK+b6*EXPK+E2 (18) HBSA=c0+c1*HHBS+c2*LHKP+c3*TTDK+c4*TTLK+c5*S DPK+c6*EXHK+E3 (19) 3. Use of Labor TPDK=d0+d1*TBUK+d2*TPNP+d3*EXHK+d4*EXPK+d5* SDPK+E4 (20) TWDK=e0+e1*TBUK+e2*TWNP+e3*EXHK+e4*EXPK+e5* SDPK+E5 (21) TTDK=TPDK+TWDK (22) TPLK=f0+f1*JBKP+f2*UTLK+f3*PTUK+f4*TPDK+f5*EX HK+f6*SDPK+E6 (23) TWLK=g0+g1*LHKP+g2*TPLK+g3*EXPK+g4*SDHK+E7 (24) TTLK=TPLK+TWLK (25) 4. Spending KOPG=h0+h1*JMAK+h2*TPRT+h3*EXPK+h4*UMPK+h5* TTDK +E8 (26) KNPG=i0+i1*KOPG+i2*TBUK+i3*EXHK+i4*SDHK+E9 (27) TKON=KOPG+KNPG (28) PKES=j0+j1*JMAK+j2*TPRT+j3*PEIS+j4*SDPK+j5*PPEN +E10 PPEN=k0+k1*JASE+k2*PELK+k3*EXPK+k4*SDHK+k5*S DPK+k6*TPRT+k7*JMAK+k8*TKON+E11 (29) TRAN=TKON+PKES+PPEN (30) TABP=l0+l1*TRAN+l2*TPRT+l3*PEIS+l4*EXHK+l5*SDPK +E12 (31) INVES=m0+m1*TABP+m2*JPNP+m3*JPUT+m4*PEIS*m5* EXHK+m6*EXPK+m7*SDHK+E1 (32) 3.1. Variables Description • PROD = Coconut productivity • EXHK = Coconut price expectations • EXPK = Coconut production expectations • SDHK = Coconut price risk • SDPK = Coconut production risks • PUGM = Use of salt • HBSA = Use of herbicides • TPDK = The use of male labor in the family in coconut farming • TWDK = The use of female labor in the family in coconut farming • TTDK = Total use of labor in the family in coconut farming • TPLK = The use of male labor outside the family in coconut farming • TWLK = The use of female labor outside the family in coconut farming • TTLK = The total use of labor outside the family in coconut farming • TPNP = The use of male labor in the family in non-agricultural activities • TWNP = The use of female labor in the family in non- agricultural activities • PTUK = Coconut farming income • TBUK = Total cost of coconut farming • JPUT = Total income from farming activities • JPNP = Total income from non-agricultural activities • TPRT = Total household income • KOPG = Food consumption • KNPG = Non-food consumption • TKON = Total consumption • PKES = Health expenses • PPEN = Education expenditure • TRAN = Total expenses • TABP = Savings • INVES = Business investment • JBKP = Number of productive coconut stems • LHKP = Coconut land area • UMPK = Farmer’s age • PEIS = Wife’s Education • PELK = Husband’s Education • LUTK = Old Coconut Farming Business • UTLK = Male labor wages for farming activities • HUGM = Price of salt • HHBS = Herbicide prices • JASE = Number of school children • JMAK= Number of family members. Rusdi, et al.: Analysis the Effect of Coconut Production Risk and Price on the Economic Behavior of Coconut Farmers in Seruyan District, Central Borneo Province, Indonesia International Journal of Economics and Financial Issues | Vol 11 • Issue 3 • 2021 67 3.2. Model Identification The coconut farmer household economic model in this study consists of 17 equations (G) with details of 13 structural equations and 4 identity equations. The model consists of 17 endogenous variables and 25 exogenous variables so that the total variables are 42 variables (K). The maximum number of variables in the equation is 8 variables (M). If (K-M) is greater than (G-1), the excess identified equation is said to be over-identified and can be estimated using 2SLS or 3SLS (Koutsoyiannis, 1977). It can be concluded that all structural equations are over identified. Based on the terms of the order condition, the model is over-identified, so the method used is the two-stage least squares method (2SLS). Data processing used Statistical Analysis System/Econometric Time Series (SAS/ETS) software version 9.3. 4. RESULTS AND DISCUSSION The characteristics of respondents in this study consisted of age, education, experience in coconut farming, and coconut land area which are presented in Table 1. Based on the results of interviews with 200 farmers, the age of coconut farmers is mostly in the age group 41-50 years and 51-60 years. with each percentage of 31.00 percent. In addition, there are 10 percent of farmers who are under the age group of 30 years, this shows that coconut farming is still in demand by young people. Furthermore, education for coconut farmers is mostly between 1 year and 6 years or equivalent to elementary school (33.00 percent). However, there are still farmers who do not get formal education (6.00 percent) and some have even educated up to tertiary education (2.00 percent). Meanwhile, the experience of coconut farming shows that the majority of coconut farmers in Seruyan Regency have experience in farming coconuts between 11 and 20 years, amounting to 38.00 percent. In addition, there are 21.00 percent of farmers with less than 10 years of coconut farming experience. The last characteristic is the area of coconut land, where land is the most important natural resource in agricultural cultivation. Based on the area of land tenure, in the research area the area of land cultivated for coconut farming is 2.8 hectares on average. Where most coconut farmers (38.00 percent) cultivate land more than 2 hectares or classified as large land. 4.1. The Influence of Production Risk and Coconut Price on Economic Behavior of Coconut Farmers Household Coconut farmer household economic behavior in this study is approached by simultaneous equations. The estimation results of the coconut farmer household economic model are presented in Table 2. In terms of criteria economy, the estimated parameter sign in the two equations is in accordance with the proposed hypothesis. The coefficient of determination (R2) ranges from 0.08512 to 0.93499. This shows that the existence of exogenous variables in the equation behavior is able to explain endogenous variables well. Based on Table 2, it is known that the coconut productivity equation (PROD) is significantly influenced by the use of herbicides (HBSA), the number of productive coconut stems (JBKP), the total labor outside the family (TTLK) and the length of coconut farming (LUTK). The amount of herbicide use has a positive effect on coconut productivity, which means that the more herbicides used, the coconut productivity will increase. Furthermore, the number of productive coconut stems also has a positive effect on coconut productivity. The results of research by Muyengi et al. (2015), Wulandari et al. (2018) show that the number of productive coconut stems will increase coconut production. The same thing is also shown by the effect of the total use of labor outside of work which also has a positive effect. Increasing the number of workers will increase the maintenance of the coconut plantation area owned by farmers, so that the production results obtained are also more and more. The salt use equation (PUGM) shows that the number of productive coconut stems (JBKP), age of coconut farmers (UMPK), and coconut production expectations (EXPK) have a significant effect on the use of salt in coconut farming. The effect of changes in the number of productive coconut stems on the use of salt has a positive sign. This is in accordance with the production theory, where the need for salt will increase along with the increase in the number of productive coconut stems. In addition, production expectations also have a positive effect, where if coconut production expectations increase, it will increase the use of salt. and the characteristics of coconut business, namely the number of productive coconut stems. The use of herbicides (HBSA) by coconut farmer households shows farmer household demand for herbicides for coconut farming. The estimation results of the herbicide use equation show that the area of coconut land (LHKP), the total use of outside labor (TTLK) and the risk of coconut production (SDPK) significantly influence the use of herbicides with positive signs. Coconut farmer household behavior in using herbicides is very much determined by farming characteristics such as the area of coconut land. Increasing coconut land area will encourage farmer households to increase the use of herbicides. The average use of herbicides in coconut farmer households is 4.66 l/ha/ Table 1: Characteristics of coconut farmers in Seruyan Regency in 2020 No Characteristics of farmers Number of farmers Percentage 1 Age of farmer (year) ≤30 20 10.00 31-40 45 22.50 41-50 62 31.00 51-60 62 31.00 >60 11 5.50 2 Level of education Did not finish elementary school 12 6.00 Elementary school 66 33.00 Junior high school 57 28.50 Senior High School 61 30.50 College 4 2.00 3 Coconut farming experience (year) ≤10 42 21.00 11-20 76 38.00 21-30 44 22.00 31-40 27 13.50 41-50 11 5.50 4 Coconut land area (ha) ≤1.0 60 30.00 1.01-2.0 64 32.00 >2.0 76 38.00 Source: Primary Data Processed, 2021 Rusdi, et al.: Analysis the Effect of Coconut Production Risk and Price on the Economic Behavior of Coconut Farmers in Seruyan District, Central Borneo Province, Indonesia International Journal of Economics and Financial Issues | Vol 11 • Issue 3 • 202168 year. The coconut production risk variable (SDPK) also has a positive effect on the use of herbicides. This shows that the behavior of coconut farmer households in using herbicides is also very much determined by the level of risk in coconut production faced by farmers. The risk of increasing coconut production will encourage farmer households to increase the use of herbicides. Increased use of herbicides is a form of risk management carried out by farmers. By increasing the use of herbicides, it is hoped that it can reduce weeds that disturb coconut plants so that it will be able to increase coconut production. The similarity in the use of male labor in the family in coconut farming (TPDK) is significantly influenced by the use of male labor in the family for non-agricultural activities (TPNP) and the risk of coconut production (SDPK). The use of male labor in the family in coconut farming is very responsive to changes in the use of male labor in non-agricultural activities. Coconut farmer household decision making in allocating male labor to coconut farming activities is largely determined by the use of male labor in non-agricultural activities. Coconut farmer households will reduce the use of male labor in the family in coconut farming activities if the use of male labor in non-agricultural activities increases. This result is almost the same as the research result of Nurhayati et al. (2012) stated that an increase in the outpouring of work outside of farming will reduce the time spent on farming activities. Furthermore, the risk of coconut production (SDPK) which has a Equation Parameters Estimate parameters t‑Value Pr>|t| PKES R2=0.08512 F Value=3.61 D-W=1.8912 Intercept 29.72724 3.56 0.0005 JMAK 0.096584 0.06 0.9507 TPRT 1.233E–7* 1.78 0.0765 PEIS 0.236364 0.40 0.6884 SDPK –0.00235** –2.20 0.0289 PPEN –0.123050** –2.11 0.0364 PPEND R2=0.15665 F Value=4.43 D-W=2.009437 Intercept –140.379 –3.16 0.0018 JASE 2.830980 0.40 0.6922 PELK 1.571150 0.91 0.3664 EXPK 0.008371*** 2.71 0.0074 SDHK –0.03058 –0.60 0.5497 SDPK –0.00742* –1.80 0.0736 TPRT 9.615E–8 0.39 0.6947 JMAK 8.540021* 1.75 0.0822 TKON –0.415267** –2.49 0.0137 TABP R2=0.26058 F Value=13.67 D-W=1.712227 Intercept –144.751 –1.79 0.0743 TRAN 0.148523* 1.69 0.0929 TPRT 1.309E– 6*** 4.98 <0.0001 PEIS 2.948420 1.39 0.1647 EXHK 0.086809** 2.27 0.0244 SDPK –0.00321 –0.81 0.4161 INVES R2=0.65672 F Value=52.47 D-W=1.893637 Intercept –183.877 –1.19 0.2340 TABP –1.10186* –1.70 0.0906 JPNP 0.691828*** 6.22 <0.0001 JPUT 7.994E– 6*** 6.44 <0.0001 PEIS 0.480156 0.12 0.9067 EXHK 0.055406 0.68 0.4997 EXPK 0.001500 0.27 0.7849 SDHK –0.11600 –1.04 0.2986 Source: Primary Data Processed, 2021. ***Significant α 1%. **Significant α 5%. *Significant α 10% Table 2: (Continued) Equation Parameters Estimate parameters t‑Value Pr>|t| Production PROD R2=0.27606 F Value=9.10 D-W=1.802844 Intercept 6994.042** 2.58 0.0105 PUGM –19.8174 –1.29 0.1977 HBSA –1165.15*** –4.21 <0.0001 JBKP 17.32798* 1.75 0.0818 TPDK 7.917620 0.88 0.3805 TWDK 137.4638 1.58 0.1168 TTLK 68.79406*** 7.04 <.0001 LUTK 64.13696* 1.66 0.0978 Input Usage HUGM R2=0.87491 F Value=224.98 D-W=1.958383 Intercept –45.6304 –0.97 0.3345 JBKP 0.496588*** 12.71 <0.0001 HUGM 0.002023 0.24 0.8078 UMPK 0.718098* 1.82 0.0706 TBUK –1.12E–6 –1.29 0.1970 SDPK 0.003870 1.10 0.2716 EXPK 0.007205** 2.51 0.0131 HBSA R2=0.88228 F Value=241.07 D-W=1.529866 Intercept –1.54584 –0.48 0.6293 HHBS –0.00001 –0.84 0.3996 LHKP 3.295079*** 11.18 <0.0001 TTDK 0.008922 1.52 0.1291 TTLK 0.017245*** 2.86 0.0047 SDPK 0.000456** 2.46 0.0148 EXHK 0.000826 0.54 0.5879 Use of Labors TPDK R2=0.38703 F Value=24.50 D-W=1.945637 Intercept 185.7037 4.61 <0.0001 TBUK –2.24E–7 –0.57 0.5672 TPNP –0.45607*** –10.56 <0.0001 EXHK 0.007735 0.33 0.7399 EXPK 0.000804 0.33 0.7385 SDPK –0.00934*** –3.18 0.0017 TWDK R2=0.23950 F Value=12.22 D-W=1.947348 Intercept 8.624100 1.16 0.2481 TBUK –1.57E–7** –2.25 0.0258 TWNP –0.00368 –0.47 0.6362 EXHK 0.005754 1.37 0.1720 EXPK 0.002264*** 5.20 <0.0001 SDPK 0.000737 1.36 0.1748 TPLK R2=0.93499 F Value=462.67 D-W=1.627376 Intercept 21.55124 0.41 0.6818 JBKP 0.100554*** 7.59 <0.0001 UTLK –0.00003 –0.07 0.9468 PTUK 1.96E–6*** 15.52 <0.0001 TPDK –0.06441 –1.35 0.1783 EXPK 0.002831** 2.34 0.0202 SDPK 0.007130*** 4.63 <0.0001 TWLK R2=0.56327 F Value=62.87 D-W=1.979295 Intercept –1.72187 –0.83 0.4059 LHKP 3.216899*** 3.96 0.0001 TPLK 0.017960 1.05 0.2969 EXPK 0.001314*** 3.13 0.0020 SDHK –0.01197* –1.74 0.0833 Spending KOPG R2=0.18555 F Value=8.84 D-W=1.534995 Intercept 178.6705 6.17 <0.0001 JMAK 14.05849*** 4.11 <0.0001 TPRT 4.061E–7** 2.26 0.0247 EXPK 0.000563 0.28 0.7812 UMPK –0.97853** –2.62 0.0094 TTDK –0.18031* –1.84 0.0680 KNPG R2=0.09621 F Value=4.13 D-W=2.076586 Intercept 80.64460 1.81 0.0712 KOPG –0.62915*** –4.03 <0.0001 TBUK –3.72E–7 –1.54 0.1242 EXHK 0.009876 0.47 0.6422 SDHK –0.030010 –0.90 0.3714 Table 2: Estimation results of coconut farmers household economic model (Contd...) Rusdi, et al.: Analysis the Effect of Coconut Production Risk and Price on the Economic Behavior of Coconut Farmers in Seruyan District, Central Borneo Province, Indonesia International Journal of Economics and Financial Issues | Vol 11 • Issue 3 • 2021 69 negative effect on the use of male labor in the family in coconut farming (TPDK). This shows that if there is an increase in the risk of coconut production faced by the kelepa farmer household, it will cause a decrease in the number of male workers in the family used in coconut farming. The results of this study are the same as the results of research conducted by Jufri et al. (2018) that an increase in the risk of production will reduce the outpouring of male labor in the family. The use of the results of the estimation of the equality of the use of female labor in the family in coconut farming (TWDK) shows that the total cost of coconut farming (TBUK) has a negative effect on the use of female labor in the family in coconut farming activities and the real level is less than 5%. This shows that the increase in coconut farming costs causes the use of female labor in the family on potato farming to decrease. Tzouvelekas (2011) states that an increase in production costs will reduce farm income so that it will increase farmers’ time spent working outside of agriculture. Furthermore, coconut production expectations (EXPK) have a positive and real effect on the use of female labor in the family in coconut farming activities. Coconut production expectations encourage coconut farmer households to increase coconut farming activities. so that the use of female labor in the family in coconut farming activities will increase. The use of female labor in the family in coconut farming activities is very responsive to changes in coconut production expectations. Furthermore, Tzouvelekas (2011) states that an increase in the price of an agricultural commodity will increase farmers’ incentives. so that it will increase the use of terja from within the family for farming activities. Based on the estimation of the parameters of the equality of the use of male labor outside the family in coconut farming (TPLK), it shows that the number of productive coconut stems (JBKP). Coconut farming income (PTUK), coconut production expectations (EXPK) and the risk of coconut production (SDPK) have a significant effect on the use of male labor outside the family in coconut farming (TPLK). The number of productive coconut stems which has a positive effect indicates an increase in the use of male labor outside the family which increases due to the increase in the number of productive coconut stems. This is due to the increasing need for male workers to care for productive coconut plants such as weeding coconut trees. fertilization. spraying as well as harvesting and gathering crops. This is in line with the results of research by Asmarantaka et al. (2017) that an increase in land area will increase the use of labor from outside the family. Furthermore, the coconut farming income variable (PTUK) has a positive effect because the increase in coconut farming income will increase the ability of farmers to pay workers who come from outside the family. This is in accordance with the results of research by Adevia et al. (2017) which shows that an increase in income from coconut farming will increase the use of labor that comes from outside the family. In addition, the coconut production expectation variable (EXPK) also has a positive effect on TPLK. The increase in production expectations causes an increase in the expectations of farmers to produce high products which will certainly have an impact on the income of coconut farming that will be received. So that if the price increases, the farmer’s ability to pay for the hired labor will be even greater. The results of this study are in line with the results of Pamusu’s (2019) research that production expectations will increase the use of male labor from outside the family. The results of the estimation of the equation parameters for the use of female labor outside the family in coconut farming (TWLK) are significantly influenced by the area of coconut land (LHKP) and coconut production expectations (EXPK) have a significant effect on the use of female labor outside the family in coconut farming (TWLK). The increase in the use of female labor outside the family, which is getting higher due to the addition of coconut land area, is due to the increasing need for labor to care for coconut plants. In the research location, female workers in coconut farming are widely used in maintenance activities such as weeding coconut trees and fertilizing. The results of research by Fariyanti et al. (2007) and Pamusu (2019) show that the area of arable land has a significant effect on the use of female labor outside the family. The wider the land cultivated by farmers, the more female workers outside the family are used. According to Kusnadi (2005) the use of labor outside the family is complementary to the area of land. The higher the land area of the farmers, the more use of labor outside the family. Furthermore, the effect of changes in coconut production expectations (EXPK) also has a positive effect on TWLK. The increase in production expected by farmers has a potential effect on expectations of income to be received. So that the increase in income will increase the use of female labor from outside the family. This is in line with the research of Mariyanto et al. (2015) that income from farming will increase the use of labor from outside the family. Furthermore, the price risk has a negative effect on the use of female labor outside the family. This is in accordance with Tzouvelekas (2011) which states that an increase in price risk will reduce the use of labor from outside the family. This is because the increased risk of price will reduce the level of farm income. Furthermore, in the expenditure block, the food consumption equation (KOPG) is significantly influenced by the number of family members (JMAK). total household income (TPRT). age of coconut farmers (UMPK). as well as the total use of labor in the family (TTDK). The number of family members has a positive influence on household food consumption of coconut farmers. This shows that there are more and more family members in coconut farmer households. it will increase household food needs so that expenditure for food consumption will increase. This is in accordance with the results of research by Babatunde et al. (2019) and Wantasen et al. (2012) stated that the more the number of household members, the greater the amount of expenditure for food consumption. Asngari et al. (2020) states that the greater the number of family members, the more rice consumption will also increase. This is because rice is the staple food of the Indonesian population. Furthermore, total household income also has a positive effect on expenditure for food consumption. Faharuddin et al. (2019). Ningsih et al. (2021). Achmad and Diniyati (2018) state that an increase in household income will have an impact on increasing household expenditure for food consumption. Furthermore, non-food consumption in coconut farmer households (NPC) is significantly influenced by food consumption (KOPG). Rusdi, et al.: Analysis the Effect of Coconut Production Risk and Price on the Economic Behavior of Coconut Farmers in Seruyan District, Central Borneo Province, Indonesia International Journal of Economics and Financial Issues | Vol 11 • Issue 3 • 202170 while other variables are like the total cost of coconut farming (TBUK). coconut price expectation (EXHK) and coconut price risk (SDHK) have no significant effect. Food consumption has a negative effect on non-food consumption in coconut households in Seruyan Regency. This shows the higher the expenditure for food consumption. Coconut farmer households will reduce non- food consumption expenditure. This condition shows that there is a trade off between spending on food consumption and non-food consumption. The health expenditure equation (PKES) of coconut farmer households shows that the total household income (TPRT). the risk of coconut production (SDPK) and education expenditure have a significant effect on health spending. Household income volume (TPRT) has a positive effect on health expenditures. An increase in household income will have an impact on the level of awareness and attention of households towards the health of family members. This can be seen from the increasing use of health insurance with higher premiums and health care activities. This is supported by the results of the research by Sen and Rout (2007) that household income is very influential on the level of household health expenditure. The higher the household income, the greater the household health expenditure. Furthermore, the coconut production risk variable (SDPK) has a negative effect on health expenditure. Where the higher the production risk faced by coconut farmers, the health expenditure will decrease. The results of research by Fariyanti et al. (2007b) support the results of this study. that the increased risk of cabbage production and the risk of potato production have a negative effect on household health expenditures. Furthermore, the education expenditure variable (PPEN) also has a negative effect on health expenditure. The higher the education expenditure. household will reduce health expenditures. This condition shows that there is a trade off between spending on health and education. Education expenditure (PPEN) is significantly influenced by coconut production expectations (EXPK). coconut production risk (SDPK). Number of family members (JMAK). and total consumption (TKON). The coconut production expectation variable (EXPK) has a positive effect on coconut household education expenditure. This means that increased production expectations will encourage coconut farmer households to allocate more education expenditures. The risk of coconut production (SDPK) has a negative effect on health spending. The higher the risk of coconut production faced by farmer households, the lower the health expenditure. The same thing also happens to total consumption (TKON) which has a negative effect on education expenditure. An increase in total consumption (food and non- food consumption) by households will reduce the allocation for education expenditure. The estimation results on the household economic behavior of coconut farmers show that the coconut farmer household savings (TABP) is significantly influenced by the total household expenditure (TRAN). total household income (TPRT) and coconut production expectations (EXPK). Total household expenditure has a negative effect. This means that the greater the household expenditure (expenditure for food consumption, non-food consumption, health and education), the less income the household can use as savings. Furthermore, the total household income variable has a positive effect on coconut farmer household savings. This illustrates that not all coconut farmer household income is spent on consumption. but also used for saving. Savings used by coconut farmers in several forms. like cattle. routine social gathering. Savings and loan cooperatives and bank accounts that can be used for time to meet daily needs as well as urgent needs such as the cost of children’s education. wedding party. and other necessities. The results of this study are supported by the research results of Wantasen et al. (2012), Nwibo and Mbam (2013), Abebe (2017) where the higher the household income, the greater the allocation for savings. The last equation is business investment (INVES). where the variable that has a significant effect is savings (TABP). total income from non-agriculture (JPNP) and total income from coconut farming (JPUT). The savings variable has a negative effect on business investment. meaning there is a trade off between saving and investment. The greater the income used for savings, the smaller the amount of business investment will be. Furthermore, the amount of income from non-agriculture (JPNP) and the amount of income from coconut farming (JPUT) have a positive effect on investment. Increased income from coconut farming and non- agricultural activities will increase the household income surplus after it is used to meet daily needs. This is in line with the results of research by Nwibo and Mbam (2013). that the increase in income received by households will increase the surplus income that can be used for investment. 5. CONCLUSION AND RECOMMENDATION The results showed that there was a simultaneous relationship between production, consumption, investment and savings in conditions of production risk and price faced by coconut farmer households. Coconut farmer households will respond to an increase in production risk by increasing the use of input in the form of herbicides. On the labor use side, the increased risk of production will lead to a reduction in the allocation of time to use male labor in the family for coconut farming, but will increase the use of male labor from outside the family who is used to improve coconut tree care. Meanwhile, on the consumption side, the response to increasing risk is by reducing the allocation of health expenditures to households, reducing spending on education, and reducing household savings. In addition, there is a risk that prices will reduce the use of female labor from outside the family. On the expenditure side, there is a risk that prices will have an impact on decreasing household income so that it is responded by reducing non-food consumption, education expenditure and decreasing business investment. The existence of production risks and prices faced by coconut farmer households will have an impact on the level of income received by farmer households. Therefore it is necessary to diversify the land used for coconut farming. such as the use of between coconut plants with other farms that do not interfere with coconut growth. In addition, to reduce the level of price risk due to simultaneous harvests, it is necessary to do joint marketing, Rusdi, et al.: Analysis the Effect of Coconut Production Risk and Price on the Economic Behavior of Coconut Farmers in Seruyan District, Central Borneo Province, Indonesia International Journal of Economics and Financial Issues | Vol 11 • Issue 3 • 2021 71 to increase the bargaining position of farmers so that the price received is not too low. 6. ACKNOWLEDGMENT This study a part of doctoral disertation at agricultural economics studies of IPB university. 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