Proceedings: 2nd International Conference on Food and Agricultural Economics: POVERTY ALLEVIATION STRATEGY FOR COFFEE FARMERS IN MALANG DISTRICT, EAST JAVA- INDONESIA

Poverty is still a scourge to be faced by the Government of Malang Regency, mainly because the number is still relatively large, ie 11.07% of the population in 2016. The concentration of poor people who still live in rural areas shows that the poverty level of agriculture sector is at a higher than urban sectors. Therefore, the revitalization of agriculture is very important to be re-emphasized. This study was conducted on coffee farmers in the dryland plains of Malang Regency, East Java, Indonesia, with a view to mapping the factors causing poverty of coffee farmers and formulating the mitigation measures. Based on data processing and information collected from various primary sources (farmers, traders, PPL and related officials) as well as secondary sources (literature and BPS) it was found that the factors affecting poverty are the relatively low quality of coffee farmers and also limited controlof agricultural land resources. Indeed, farmers work very hard to enlarge their income from their narrow land by cultivating it intensively and integrating it with livestock and additional work outside the farm. However, the results have not been able to lift farmers' income away from the poverty line. This is partly due to the very weak position of farmers when dealing with middlemen in the input market and output markets. Farmers have dependence on middlemen to fulfill capital requirement in farming. Meanwhile, government efforts through policy and service programs are not very effective. To help farmers out of the socio-economic difficulties they face, this study proposes the development of the People's Agribusiness Sentra (SAR Cooperative) which is driven by three basic principles (Principles of Cooperatives (PK), Principles of Business (PB) and Networking Principles (PJ). By applying these three principles, through Cooperative SAR farmers' position will be much stronger in the market because it will face the market collectively, benefit from "economics of scale", increase the value added of the product through processing, relinquish the dependence on venture capital from middlemen, and expand business activities through partnerships with agribusiness companies.