The efficiency of the auction market of chili in the sandy coastal area of Yogyakarta Province, Indonesia

The auction market of chili in the Kulon Progo Regency has proven to have many benefits to the farmers. The competition among traders in the auction market will elevate the price, making it more profitable to the farmers. However, there are still opportunities to improve the auction market performance. This study was intended to help determine the efficiency of the auction market of chili in the sandy coastal area and its determinant factors. The research was conducted from April to July, 2018. The respondents were 13 managers of all auction markets in the sandy coastal area of Kulon Progo Regency. The research used the Data Envelopment Analysis to know the efficiency of the auction market and binary logistic methods for analyzing its determinant factors. The study showed that most of the auction markets were not efficient. There were only 2 efficient auction markets, namely Auction Group 5 and Gisik Pranaji. This was due to the fact that the two auction markets had complete supporting infrastructure and management training. Both of the auction markets’ manager also had a good partnership with the traders in other cities. Meanwhile, the main problem of the inefficient auction market was getting a low selling price in the harvest season. The determining factor of the efficiency is the managers’ experience in farming. In fact, managers with long working experience have an impact on their creativity to develop the auction market. This is because such managers with a long experience of chili farming will understand market conditions. The experience is also beneficial for the managers in establishing partnerships with buyers. The other variable, the auction markets’ capital, did not affect probability of the auction market to increase their efficiency. To increase their efficiency, it is necessary for the auction markets’ manager to follow the various management training and formal education. © 2021