Characteristics of Effectively Farmer Groups to Manage Agricultural Machinery Rental Business: A Multi-Case Study Approach

Abstract

The Ministry of Agriculture provides machinery grants to farmer groups to accelerate agricultural mechanization and rental business capital. Therefore, this study aims to identify the characteristics of farmer groups that were effective in managing agricultural machinery rental businesses. This study used qualitative methods, a multi-case approach, and thematic analysis. The locations were the farmer groups in Kebakkramat District. The Informants from agricultural extension civil servants were selected according to their place of duty. Informants from the chairpersons and members were determined using the snowball sampling method. The data collection techniques used in-depth interviews and focus group discussions. There were two stages of data analysis. The first was to assess the effectiveness of each farmer group. The second was to compare the characteristics of the effective and less effective farmer groups. Only one of the nine farmer groups was effective. The characteristics of farmer groups that were effective in managing the machinery rental business were: (1) have relatively several members who are willing to involve in management, (2) have members who are willing to become loyal customers, (3) choosing a certain form of business entity, (4) requires members to deposit capital, (5) distribute profits to members, (6) give members ownership rights to the grant, (7) requires management to run farmer group operations, manage business units, and make financial reports, and (8) give the management salary rights. Farmer groups that manage businesses with business entities had more effective farmer group characteristics than groups without business entities.