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Indonesia is the second biggest natural rubber producer in the world; however its processed rubber has low quality and price. This is because the rubber plantation most cultivated by non estate plantation (smallholding plantation). Central government of Indonesia has developed some policies to overcome this problem and one of them is to establish the Processing and Marketing Unit of Rubber material or PMUR (‘UPPB’) since 2008. However until 2014 only a few farmers (around 5%) had sold their products with PMUR and most farmers sell their products through traditional marketing channel. This study’s aims are to discuss how big impact the existing of new marketing channel (PMUR) to farmer’s income is. Study conducted in two districts (Banyuasin and Musi Rawas) of South Sumatera Province, which represent two kinds of marketing channels, those are the auction market system and the partenership market system. Sampling taken of 64 farmers (as respondents), represent participant and non participant of new market system. Data collection was done in April to September 2017. The result of this study shows that there are significantly different income for farmer’s participants (PMUR) and non participants (non PUMR). The farmer’s income at the auction system is higher (abaout 57%) and the farmer’s income at the partnership system is higher (about 64%) than traditional marketing system. However income of both new marketing systems or PUMR (auction and partnership systems) are not significantly different.

EFFECT OF DIFFERENT RUBBER MARKET SYSTEM ON FARMER’S INCOME IN SOUTH SUMATRA PROVINCE, INDONESIA