Analysis of Supply Response and Market Integration of Cayenne Pepper in West Nusa Tenggara Province

Lasmiyati, Siddik, Usman

Abstract: This study aims to identify factors influencing the supply of cayenne pepper, supply response, price variation, and vertical and horizontal market integration of cayenne pepper in West Nusa Tenggara Province. This study uses a descriptive method. The type of data used is quantitative data in the form of secondary monthly time series data for 2016-2023. Data collection uses documentation techniques, by accessing and downloading data from official websites and from report books provided by various related agencies. Data analysis uses the Cobb-Douglas model, coefficient of variation, and theVector Autoregression (VAR), fromVector Error Correction Model(VECM). The results of the study show that the factors that positively and significantly influence the supply of cayenne pepper in NTB Province are the planting area (X1t-2 ), and the price of curly chilies (X3t-2 ) two months earlier; negatively and significantly is the price of large chilies (X4t-2 ), price of SP-36 fertilizer (X5t-2 ), and rainfall (X6t-2 ) two months earlier.The supply response of cayenne pepper in NTB Province is determined by the area of planting area (X1t-2 ) as big as+0,5567, price of cayenne pepper (X2t-2 ) as big as-0,2163,price of curly chilies (X3t-2 ) as big as1,5807, price of large chilies (X4t-2 ) as big as-1,4345; price of SP-36 fertilizer (X5t-2 ) as big as-4,7946and rainfall (X6t-2 ) as big as-0,6444. VariationsPrice of cayenne pepper in West Nusa Tenggara Province sto liveOver the past eight years (2016-2013), prices have fluctuated significantly. At the producer level, the coefficient of variation was 0.40, and at the consumer level, it was 0.61. Vertical integration of the cayenne pepper market in West Nusa Tenggara Province is weak. This means that changes in the price of cayenne pepper in NTB at the consumer level are not well transmitted to the producer level, or vice versa. Meanwhile, horizontal market integration between cities/regencies in West Nusa Tenggara Province has been good in both the short and long term. This means that price changes in one city or regency, such as Mataram City as the reference market, affect prices in other cities or regencies.