A Pls–Sem Approach To Analyse Factors Affecting Farmers’ Accessibility Towards Markets And Its Relation To Farmers’ Bargaining Position: A Case Of Gambir Farmer In West Sumatera

Abstract

This study investigates factors influencing Gambir farmers' market accessibility and their bargaining position with middlemen in West Sumatra, using Partial Least Squares Structural Equation Modeling (PLS-SEM). Despite West Sumatra contributing over 80% of global Gambir production, small-scale farmers face challenges such as weak market access, dependency on middlemen, and limited negotiation power. This study integrates Transaction Cost Economics (TCE) and Social Capital Theory to identify critical factors—such as infrastructure, farmer groups, and knowledge—that influence market accessibility and examines their impact on farmers' bargaining positions. The results indicate that improved infrastructure and farmer group participation significantly enhance market access, while dependency on middlemen limits farmers' ability to negotiate favorable terms. The findings contribute to the existing literature by providing a theoretical understanding of market dynamics in oligopsony markets and proposing actionable solutions to enhance farmers' market participation and bargaining power.