"Based on the results of monitoring the prices in the rural areas in 11 West Sumatra districts, the exchange rate of farmer in July was 95.82. Then in August, it rose to 96.24," Head of West Sumatra BPS, Sukardi remarked in Padang, Tuesday (Sept 5).
He explained farmer's exchange rate is obtained from comparison of farmer's price index which farmer gets and farmer pays, which is one indicator to see ability or purchasing power level of farmers in rural areas.
According to him, the exchange rate of farmers also shows the exchange rate of agricultural products with goods and services consumed for production costs.
"The higher exchange rate of farmers, the stronger ability or purchasing power of farmers," he said.
He said after having dropped in the last few months, the exchange rate of peasants in West Sumatra back up.
"If the exchange rate below 100, it means that agricultural production is not able to cover production costs such as buying fertilizer and operations," he said.
Sukardi cited the exchange rate of farmers in August for food crop sub-sector was 91.16, horticulture subsector 86.19, sub-sector of smallholder estate 98.98, livestock sub-sector 106.54 and fishery sub-sector 109.96.
He stated regionally in West Sumatra there was inflation in rural areas of 1.30 percent in August due to inflation in foodstuffs group 2.36 percent.
Meanwhile, the price index received by farmers in August rose 1.47 percent and the price index paid by farmers also rose 1.02 percent.
Earlier, West Sumatra Food Crops Agricultural Service announced about 30 percent of 600 thousand heads of farm families in the area have had farmers' insurance or 'Asuransi Usaha Tani' (AUT).
"At first absorbed by 15 percent, now it has reached 30 percent of farmers who have AUT," Head of West Sumatra Food Plants, Candra pointed out.
He said the premium value of Rp180 thousand with a subsidy from government of Rp144 thousand, farmers only pay Rp36 thousand per hectare of land for each growing season.
"Compensation can be paid a maximum of Rp6 million with damage of more than 75 percent," he said.
He said farmers can claim if farmland is drought, damage caused by flood or pest attack. (*)