Improving operational efficiency analysis through marketing performance (Cymbopogon Nardus L.

The agricultural sector, particularly citronella oil production, is pivotal to Indonesia's economic growth and export potential. The marketing efficiency of citronella oil in Rokan Hulu Regency, Riau Province was analysed to optimise the contribution of the sector to the economy. A descriptive method alongside qualitative and quantitative approaches, based on statistically analysed primary and secondary data, were used. Five marketing channel strategies were examined, revealing variations in production costs, income generation, and profitability across different channels. The market structure for citronella oil in Rokan Hulu Regency was characterised as oligopsony on both the seller's and buyer's sides, indicating a concentrated market with limited buyers and sellers. Marketing channel I demonstrated the best performance, with the lowest production cost of IDR 477,479.17 per kg, the highest farmer's share of 95.24%, and the best profit-to-cost ratio of 9.35. This channel also had the smallest margin of IDR 8,000 per kg and generated the highest income of IDR 2,400,000 per harvest. In contrast, marketing channel III incurred the highest costs at IDR 1,105,451.26 per kg. Overall, the marketing of citronella oil in Rokan Hulu Regency was found to be efficient, with selling prices remaining relatively profitable for farmers, especially through shorter marketing channels. The efficiency of marketing channels was assessed based on price, with more efficient pricing indicating a better market structure. The study also analysed the marketing functions performed by various institutions, including exchange, physical, and facility functions, which contribute to the overall efficiency of the marketing system. These findings can be utilised by policymakers, agricultural extension services, and farmers to improve marketing strategies and increase the efficiency of citronella oil production in the region, ultimately contributing to the development of Indonesia's agricultural export sector and enhancing the economic well-being of citronella farmers in Rokan Hulu Regency