Household Economic Decisions of Corn Farmers at West Timor, Indonesia

Abstract

The study aimed to identify factors that influence household economic decisions of corn farmers related to the allocation of time, production activities, corn consumption and policy simulation which can increase household economic of corn farmer. Research was conducted at Tesbatan and Camplong II Village, West Timor, Indonesia. Data were analysed using a system of simultaneous equations. Parameter estimation used Two Stage Least Square (2SLS) and simulation analysis was used for getting alternative policy. The result showed that household economic decisions of corn farmer were affected by the level of wages and farming area. Corn production was influenced by the farming area, the use of labor, urea fertilizer and seeds. Consumption of corn was affected by the price of corn, household income, corn production and the number of household members. Then, Consumption of purchased corn was influenced by household income, corn production and the number of household members. The policy to increase the price of corn was very effective increasing household income but reduce the consumption of corn. Furthermore, the policy of expansion of the scale of farming could increase household income and consumption of corn.