PT SSS is located in Megamendung Village, Bogor Regency. It was established in 2010 as a company’s child of PT SM established before in 1986. The first commodity produced by PT SSS is edamame. Then, it is developing to be vegetable commodities, i.e. lettuces, bell peppers, Chinese mustard greens, sweet corns, cauliflowers, recent tomatoes, cherry tomatoes, mini cucumbers, shishito, etc. Those vegetable products are supplied to fast food restaurants and supermarkets, i.e. McD, KFC, Bakmi Gajahmada, Domino’s Pizza, Lawson, Hokben, Hero, Carrefour, Hypermart, Lion Superindo, Ranch Market, Burger King, Sate Khas Senayan, Solaria, Pizza Marzano, Purantara Inflight Catering, Pizza Marzano, Purantara Inflight Catering, Lawson, Johny Rockets, PT. Intan Kenkomayo, Jaddi Foods, Rejuve, Nam Nam Resto & Noodle Bar, and Coffee Bean. PT SSS’s products are whole fresh vegetables, vegetable fresh-cuts, mixed salad ready to eat, and boiled vegetables. The staff number of PT SSS is 115 persons. Table 1 mapped the staff characteristics based on education level, age, and sex. Generally, the staff of PT SSS are dominated by staff whose education levels are Junior High School, Elementary School, and not graduated, whose ages are about 20-39 years old, and who are males. In production management, PT SSS divides their staff into two shifts, i.e. morning shift and night shift according to the arrival of material.

During the COVID-19 pandemic on March 2020, the working performance of PT SSS was affected. That condition was reflected by the decreasing company’s working performance, i.e. sales level, profit, and less labor. The decrease in the company’s working performance not just occurred in PT SSS, but also among major companies in Indonesia affected by the global supply chain system ((, 2021); (Fu & Shen, 2020); (, 2020); (Shen et al., 2020)). Not only in Indonesia, (Shen et al., 2020) reported that the COVID-19 pandemic had a negative impact on industry performance, especially in the tourism, catering, and transportation sectors. Not only the manufacturing sector, but the banking sector was also negatively affected during the COVID-19 pandemic as reflected in the reduced performance of Return on Equity (ROE), Net Operating Margin (NOM), and Financing to Deposit Ratio (FDR) (Sutrisno et al., 2020)including reducing the performance of the world economy. The pandemic has changed human behavior so that it needs adaptation to new habits. Banking as a business group was also affected because the decline in company performance had an effect on the decline in banks, including Islamic banks. The purpose of this study is to examine the impact of the Covid-19 pandemic on the performance of Islamic banks in Indonesia. The performance of Islamic bank consist of capital adequacy ratio (CAR).

Table 1 shows PT SSS’s working performance summarization during 2021. Generally, in 2021 the working performance was affected by the COVID-19 pandemic that entered Indonesia on March 2020. At the beginning of the pandemic, PT SSS suffered a decrease in sales turnover by 40% occurred during 5 months. Because the caution was most customers of PT SSS were affected by High Scale Social Limitation, the demand for product vegetables also decreased. The demand decrease also affected directly to 50% of PT SSS’s staff who were housed, until 10% of those housed staff were terminated in working relationships because of the prolonged COVID-19 pandemic. Until now, PT SSS has not recovered as before the COVID-19 pandemic.

In 2021, the government lengthened again the policy of High Scale Social Limitation, but the rules were loosened until the end of December 2020. That condition affected positively the PT SSS’s working performance in 2021. Although it has not recovered as before the pandemic, the company’s working performance, i.e. selling level, profit, and labor addition show a positive trend. In 2021, there was a new customer, i.e. Sayurbox. The technology used during this time is manual and automatic technology. Although during 2021 there was no new technology adoption for all lines of management, there was a product innovation, i.e. boiled vegetables as customer’s demand.

The establishment background of PT SSS involved the roles of partner farmers who have been cooperating since the beginning of the company’s establishment. That condition causes this company considers the importance of partner farmers’ existence to support its business management process. As PT SSS is continuing the agribusiness contract farming pattern with partner farmers in the future, the company’s inclusivity will be obtained. Otherwise, there are some things to evaluate and monitor for avoiding conflicts of importance between the two sides. PT SSS admitted feeling satisfied with the working performance of the contract farming pattern applied during this time with farmers.

According to the analysis of external factors, the fertilizers’ availability and affordability affect negatively the company’s working performance and the sustainability of the contract farming system. It needs governmental intervention in a supply stability and fertilizer price for productivity and agribusiness’ working performance generally. At the macro level, the fertilizers’ availability and affordability are determinants for achieving the national food endurance.(Ragimun & Setiawan, 2020) mentioned the strategies for distributing subsidized fertilizers are implemented by some alternatives distribution, i.e. card utilization by gapoktan, subsidized fertilizer distribution by Pupuk Indonesia Mart merchant, and direct distribution to fertilizer producers. (Setiawan et al., 2021) and (Herath et al., 2015) stated the policy of subsidized fertilizers correlates positively to the production level and farmers’ acceptance.

In addition to a partner company, to analyze the sustainability of contract farming patterns, the researcher identified the background and contract farming perspective from the partner farmers’ side. The number of contract farmers becoming respondents in this research is 4 persons having an area of 0.43 to 3.5 ha. In this research, the partner farmers analyzed have an education level that is not high and variation in cultivation duration, i.e. new farmers have 4 years of experience until experienced farmers for 27 years. The same condition occurred to partner farmers, i.e. new partnership for 2 years until a long partnership for 25 years. As Chinese mustard greens are the highest demand product in PT SSS, the majority of partner farmers cultivate Chinese mustard greens as the company’s requirements. In addition to cultivation, some partner farmers are also sellers as their other job. Table 3 shows four profiles of partner farmers and their agribusiness.

The existence of PT SSS as the main partner of agricultural result marketing provides benefits for partner farmers because of the price certainty and market guarantee. The same condition also occurs in several agricultural partnerships in Indonesia, for example, the sugarcane partnership in Mojokerto Regency. Sugarcane companies provide market guarantees, capital assistance, and profit sharing (Azmie et al., 2019). Generally, the prices agreed by both sides tend to be higher than market prices, except when the market prices achieve the highest level. Generally, the conventional marketing by middlemen often harms the farmers because agriculture results in price information ignorance. The pattern of contract farming cuts the agricultural commodities’ distribution chain becoming more efficient and effective and the farmers will receive higher profit (Meemken & Bellemare, 2020). Partner farmers admitted to being always partners of PT SSS. Another benefit received by partner farmers is an agricultural input loan accessibility paid after harvest season by direct cutting of agricultural result acceptance (Ton et al., 2018). The same partnership pattern also occurs at PT Bimandiri Agro Sedaya which also facilitates farmers by providing agricultural input credit assistance with the aim that supply chain performance can run smoothly (Rani et al., 2017).

This condition assists the capital of the partner farmer. For agribusiness, the financial capital is a crucial aspect used by farmers to purchase agricultural inputs, i.e. seeds, fertilizers, and pesticides. The loan scheme of agricultural inputs in this contract farming pattern is a policy that affects positively the sustainability of agribusiness. However, the partner farmers admitted that they have no guidance or training from the company. If there is a cultivation problem or technology/innovation adoption, a partner farmer will consult with other partner farmers having more experience.

The scarcity and high-tended price of agricultural input, i.e. fertilizers, become the general problems faced by partner farmers. Other agricultural input, i.e. pesticides, has a high-tended price. The use of chemical fertilizers and pesticides that intensity is high also affects negatively the environment. Chemical residues from pesticides affect negatively human health through pollution and food material. The use of chemical matter affects negatively pollution and global warming (Chandini et al., 2019) (Tudi et al., 2021) (Zhang et al., 2018). That condition affects the sustainability of contract farming, mainly from the environmental dimension. (Azmie et al., 2019) explained that in order to reduce the environmental impact of the intensity of the use of chemicals, both parties, namely the Gempolkrep Sugar Factory and farmers, agreed to limit the use of chemicals, such as fertilizers and pesticides. It needs a government’s participation to solve this problem. The training of synergized agricultural patterns including the environmental aspects should be conducted again by the government for obtaining the sustainability of agriculture.

The one of reasons of the contract farming pattern applied in PT SSS is to fulfill continuity and good quality because the product results of the area managed by PT SSS are not enough to fulfill consumers’ demand. The contract farming pattern is conducted with farmers in Bogor Regency and Garut Regency. Vegetable products produced by partner farmers in Bogor Regency are all kinds of vegetables, including Chinese mustard greens, sweet corns, cauliflowers, tomatoes, cucumbers, and shishito. Meanwhile, in Garut Regency the area is specified for lettuces because lettuces cultivation is more appropriate in the area by the height of 1,000 meters on the sea surface. The number of partner farmers in Bogor Regency is 40 farmers, while in Garut Regency they are 50 farmers.

Figure 2 and Figure 3 show the comparison of vegetable land area and production in Bogor Regency and Garut Regency. Those figures show the vegetable land area and production in Garut Regency are higher than in Bogor Regency. The determination of PT SSS for conducting the expansion of contract farming with farmers in Garut Regency is evaluated right to fulfill the supply needs. Otherwise, in Bogor Regency and Garut Regency, the vegetable land area and production tend to decrease. That condition becomes a specific problem for the sustainability of PT SSS. As the harvest area decreases, the caution is the cultivation competition with other commodities and area conversion. They affect the product decrease that is not balanced with productivity increase. The climate and weather factor includes the main factor that is the caution of quality and productivity uncertainty. Climate change occurs globally that negatively affects the rainfall patterns and eventually, agricultural productivity ((Ayinde et al., 2011); (Bandara & Cai, 2014);(Lal, 2011); (Rahman & Anik, 2020)).

There are two contract farming patterns of PT SSS and farmers, i.e. plasma core pattern and general trading pattern. (Kundang, 2017) stated that plasma core contract farming is a contract farming relationship with partner groups (farmers, farmer groups, farmer group association, cooperation, and small business) with partner farmers as core, while farmer groups as plasma. Partner company collects agricultural results, provides services, and guides farmers or farmer groups. The plasma nucleus partnership pattern has been widely adopted by various companies in Indonesia, including a partnership between eastern mushroom farmers and CV Asa Agro Corporation (Alam & Hermawan, 2017), a partnership between tea farmers and PT Pagilaran (Perwitasari et al., 2021), and coconut farmers palm oil and PT Gunta Samba. Based on the analysis of the partnership pattern, shows a tendency that the majority of plasma farmers are satisfied with partnering with the other company, which is strongly influenced by market guarantees.

Figure 3 shows the relationship between the partner company and partner farmers in the plasma core pattern. In this research, PT SSS acts as a core that collects agricultural results and provides services. PT SSS provides the agricultural input loan scheme, i.e. seeds, fertilizers, and pesticides paid after harvest season. The agricultural input credit is not tied or partner farmers should not purchase the agricultural inputs from a partner company. The agricultural inputs, i.e. land and labor should be prepared by farmers themselves. According to the contract farming pattern, PT SSS obtains products as appropriate in number and quality, while partner farmers obtain market and price guarantees.

If the quality products are not appropriate, those products will be sold by partner farmers outside the company. In this research, the farmers or farmer groups that involve in plasma core contract farming patterns are mentioned as farmer partners, while the farmers or farmer groups that involve in general trading contract farming patterns are mentioned as partner purchasers. PT

SSS also provides trainers providing a guide and training during cultivation. Several partnership patterns also provide training and mentoring for partner smallholders, an example is a partnership between PT Gunta Samba and oil palm farmers in East Kalimantan. Research conducted by (Amam et al., 2019) explains that in general farmers are satisfied with the instruments contained in the partnership pattern.

In contract farming, PT SSS determines the number and sort of vegetables that will cultivate. Contract farming also relates to the purchasing price of vegetables from partner farmers consisting of the minimum and maximum prices that pattern follows the market price. Although there is a minimum purchasing price, partner farmers should have a profit because the purchasing price has considered fixed and variable production costs. The contract farming agreement runs in one cycle of plant cultivation. Then, there is a new agreement when enters the cultivation period. At first, the agreement characterizes in documents, but currently, the agreement is just characterized verbally because of the belief factor. (Topan & Ifrani, 2020) argue that written agreements on agricultural partnerships function as legal protection functions to resolve problems that occur. PT SSS needs to revise the partnership using a written agreement to reduce the conflicts that often occur between the two parties.

The plasma core contract farming pattern is applied in some sectors and other areas, i.e. broiler chicken farming in Magelang, Central Java. The research conducted by (Daryanto et al., 2015) summarized the plasma core contract farming pattern enhances the economic benefits for breeders. That contract farming pattern is applied by a palm oil company in Indonesia that summarizes the plasma core contract farming simplifies the company to obtain a certificate of ISPO (Indonesia Sustainable Palm Oil) (Rosyani et al., 2021). The main farmer’s motivation to conduct agribusiness is economic factor (Mariyono, 2019), so (Smalley, 2013) stated the farming contract pattern should be inclusively conducted, specifically to reach prosperous farmers. Second contract farming applied by PT SSS is the general trading pattern. (Kundang, 2017) stated the general trading pattern is a partnership between farmers or farmer groups with a partner company that just involves an agricultural result trading agreement. This contract farming pattern differs from plasma core pattern. In general trading pattern, PT SSS does not provide the facility of capital or agricultural input credit, i.e. seeds, fertilizers, and pesticides such as in plasma core pattern. The general trading pattern is applied in PT SSS if less supply from partner farmers. The prices applied in the general trading pattern follow the market prices. The general trading pattern is important to solve the productivity uncertainty and high- quality product of vegetable cultivation. Both crucial factors are determined by external factors, i.e. weather and climate factor.

The general trading partnership pattern is also implemented by PT Nestle with coffee farmers. Even though it has several advantages such as the continuity of coffee products and value chain efficiency, coffee farmers have to work harder and add certain costs so that the quality meets the company’s criteria. Just like what was done by PT SSS, the absolute price determination process was carried out by the company (Yoansyah et al., 2020). Romdhon and Sukoyono (2011) added that the general trade partnership pattern tends to require more capital because the cooperation is only limited to commodity sales, so farmers do not have credit facilities either cash or agricultural inputs to the company. (Saptana et al., 2010) explain that the general trade partnership pattern tends to place farmers in a weak position, especially in terms of market guarantees and price certainty. This condition causes farmers to continue to experience the risk of price fluctuations. Generally, the general trading contract farming relationship between a partner company and partner purchasers is shown in Figure 5.

The general trading contract farming pattern adopted by lobster commodity in Bengkulu that affects positively the profit of breeder has a weakness because the contract farming agreement including the rights and obligations of company and breeder is just conducted verbally (Sukiyono & M, 2011). The general trading pattern is also applied to the broiler chicken livestock business in Malang Regency, East Java. For sustainability that contract farming, the breeder’s access to physical, economic, and social resources should be considered (Amam et al., 2019).

Many researchers stated that the contract farming pattern is a strategy to enhance profit financially for both partner companies and partner farmers side ((Bellemare, 2015); (Bellemare & Lim, 2018);(Velde & Maertens, n.d.)). However, in the development, there are some problems both problems caused by involving internal side and external that threaten the sustainability of contract farming. The analysis of the problem in contract farming pattern that both problems occurred by a partner company and partner farmers is shown comprehensively in Figure 6. Four main dimensions affect the sustainability of contract farming, i.e. economic, social, environmental, and governmental dimensions. Those dimensions relate to each other. The economic, social, and environmental dimensions are crucial aspects that affect the sustainability of food and agriculture ((Bacon et al., 2012); (Choi & Ng, 2011); (Francis & Porter, 2011); (Latruffe et al., 2016); (Nurjati, 2022) ), (Nurjati, 2022)while the governmental dimension by governmental management plays a role significantly to the competitiveness and sustainability of agricultural sector ((Sebudubudu, 2010); (Ugwu & Kanu, 2012)). If there is a problem in a dimension, then it will affect the working performance of other dimensions (Dempsey et al., 2011).

In the economic dimension, both a partner company and partner farmers have interrelated problems. The cultivation is affected by external factors that can not be controlled, i.e. climate and weather factor that often causes harvest failure. As decreasing production and inappropriate quality cause the partner company not to purchase the agricultural results, the partner farmers will sell them to others at a lower price. The uncertainty of supply quality and quantity becomes a crucial problem in contract farming.

According to the environmental dimension, various problems threaten the sustainability of contract farming patterns. The problems occurred in the environmental dimension generally cause economic problems. The continuity of vegetable demand causes no plant rotation in agricultural areas. The plant rotation system is plant cultivation by rotating or planting more than one sort of different plant at different times. That system has various benefits, i.e. 1) capable to decrease the intensity of pests and illness, 2) enhancing the fertility of the soil, and 3) being a micro ecosystem stabilizer. Because of no plant rotation, the soil’s fertility decreases, and the pests and plant illnesses increase. Furthermore, that condition disturbs the ideal ecosystem. No plant rotation causes a decrease in productivity level and an increase in agricultural input costs, mainly pesticides that cause profitability received by farmers tend to decrease ((Makarim & Mejaya, 2017); (Taufiqurrohman et al., 2013)). Certainly, it threatens the agriculture’s competitiveness and sustainability, specifically vegetables. (Kuntashula et al., 2014) stated the farmers in Zambia have adopted the strategy for decreasing the climate change impact by plant rotation system that also affects farmers’ income by agricultural result productivity increase.

In addition, the agricultural area conversion to non-agricultural massively occurred in Puncak area, specifically Megamendung Village, Bogor Regency, becomes an important problem that should be managed. In addition, causing the vegetable land area to decrease, the area conversion also decreases the ecosystem support power needed for cultivation. The building establishment activity affects main agricultural inputs, i.e. water and soil quality decrease (Riskanita & Widowaty, 2019). Furthermore, that establishment impact also tends to cause disasters, i.e. landslides and floods ((, 2021); (Riskanita & Widowaty, 2019)). That condition is one of the main threats to the sustainability of agriculture. Government participation is needed to implement the policies regarding the environmental aspects.

Another dimension that affects the sustainability of contract farming patterns is the government that acts essentially to formulate the policies. Fertilizer is a problematic agricultural input because of the scarcity and expensive price. Government intervention is needed for farmers to obtain fertilizers at affordable prices for their cultivation. In addition to subsidized fertilizers, the strategy for distributing fertilizers to exact targets should be developed ((Adnyana & Mohktar, 2019); (Darwis & Supriyati, 2016)). In addition, government obliges to provide training and guidance regarding cultivation to produce a harvest that obtains quality and quantity requirements. The policy regarding area conversion also needs government intervention for the sustainability of agriculture.