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Pelalawan regency has the potential of smallholder rubber plantations are widespread.
Extensive rubber plantations alone in 2014 reached 26415.90 ha or equal 7.20% of the total
plantation area overall. But until now the utilization of plantation products has not been of
great benefit both for the farmers and society in general. Therefore it is considered essential to
increase the economic value added of smallholder rubber plantations in Pelalawan. This study
uses a new institutional economic review. Results of the study found that approximately 76% of
household income rubber farmers in the regency is supported by income from their rubber
plantation. The study also found that so many layers of traders involved, making the chain the
marketing of rubber in Pelalawan long enough and long chain trade system that resulted in a
low selling prices at the farm level, hence farmers can only receive the price of rubbers. In the
end, the study found that in order to increase economic value added of smallholder rubber
plantations need to make institutional improvements rubber plantation in Pelalawan.