The Effect of Production Costs on the Income of Tobacco Farmers in East Lombok Regency, Indonesia

Abstract

Background. This study addresses the issue of high tobacco production costs that are not proportional to the income earned by tobacco farmers in East Lombok Regency. As a result, the welfare of tobacco farmers is presumed to be relatively low. This condition indicates a gap between production expenditures and farmers’ income levels, which warrants further empirical investigation. Purpose. The purpose of this study is to analyze the effect of production costs on the income of tobacco farmers in East Lombok Regency. Method. This research employs a descriptive quantitative approach using a correlational method to examine the relationship and influence of production costs on farmers’ income. The study is grounded in the theory of production costs proposed by Faisal (2022) and the income theory developed by Bramastuti (2009). Data were collected through questionnaires distributed to 100 respondents, complemented by observation and literature review. Respondents were selected using a Disproportionate Stratified Random Sampling technique due to the non-uniform and stratified characteristics of the population. Results. The findings indicate that the calculated t-value (9.887) is greater than the t-table value (2.365), demonstrating a significant effect of production costs (X) on the income of tobacco farmers (Y). The significance value (Sig.) of 0.000 is less than 0.05, leading to the rejection of H₀ and acceptance of H₁. This result confirms that production costs significantly influence the income of tobacco farmers in East Lombok Regency. Furthermore, production costs account for 49.9% of the variation in farmers’ income, as indicated by a coefficient value of 0.499. Conclusion. Based on the analysis, it can be concluded that production costs have a positive and significant effect on the income of tobacco farmers in East Lombok Regency.