FINANCE ACTIVITY OF CAPITAL STRENGTHENING FUND - RURAL BUSINESS INSTITUTION (DPM-LUEP) AT BANJAR DISTRICT SOUTH KALIMANTAN PROVINCE

Abstract

The aims of the research are to know LUEP’s cash inflow and outflow, to calculate cost, revenue and profit on LUEP, to know LUEP feasibility (Cost Revenue Ratio), and to identify the LUEP problems on buying and milling rice business. The research was conducted by census from February 2013 to Mei 2013. It covered Beruntung Baru sub-district (Lawahan, Jambu Raya and Haur  Kuning village), Sungai Tabuk sub-district (Tajau Landung and Gudang Hirang village), Martapura sub-district (Tambak Baru Ulu village), Martapura Timur sub-district (Antasan Senor village), and Martapura Barat sub-district (Sungai Rangas Ulu village). Primary data was collected by interviewing LUEP committee members and managers, farmers, and other community members. In addition, secondary data were collected from food security agencies and statistical board in district and province level, as well as other related references. The results are described as follow. Every month, LUEP buys 7,812.5 kg of local variety and 19,125 kg of high variety yield (HVY) of unhulled rice from farmers. The average fixed cost is IDR 5,095,106.25 per month (IDR 61,141,275 per year) and average variable cost is IDR 111,621,625 per month (IDR 1,339,459,500 per year). On rice buying and milling business, LUEP expense average total cost IDR 116,716,731.25 per month (IDR 1,400,600,775 per year). The revenue is IDR 128,091,250 per month (IDR 1,537,095,000 per year). Thus, the profit is IDR 11,374,518.75 per month (IDR 136,494,225 per year). The RCR value is 1.10 which means that LUEP business in rice buying and milling is feasible. LUEP rice buying and milling business encounter several problems, as follow: (a) difficulty in acquiring fuel for the milling machine, (b) the late of fund transfer from government which cause the fund use is less than a year while the fund must be returned on the year end, (c) the existence of LUEP is not informed well, so many farmers still sell their harvest to middle trader in lower price, and (d) LUEP administrative system and report is incomplete, so the reporting process of DPM-LUEP activities is usually late.