<![CDATA[Imperfections in the market structure for perennial plantation commodities often trigger the phenomenon of asymmetric price transmission, which widens the price disparity between international exchanges and farm-gate prices. This study aims to quantitatively analyze the impact of international-domestic price disparities on the supply volume of oil palm (Cocos nucifera L.) and farmers’ supply volume decisions using the Farmer Choice Model econometric approach. Data were collected through a structured survey of 100 coconut-farming households in West Tanjung Jabung and East Tanjung Jabung Regencies, Jambi Province, and combined with time-series data on international reference prices (CNO Rotterdam CIF) for the period 2020–2025. The Heckman Two-Step Selection Model was used to address sample selection bias. In Stage 1 (Selection Equation—Probit), the study results show that price disparity has a significant negative effect on the probability of farmers participating in the formal market (β = -0.0412, p < 0.01). In Stage 2 (Outcome Equation—OLS with Inverse Mills Ratio Correction), the price disparity variable had a coefficient of -0.1854 (p < 0.01), demonstrating that a 10% increase in price disparity reduces coconut supply volume by 1.85%. The significant Inverse Mills Ratio coefficient (λ) (λ = -0.412, p = 0.028) confirms the presence of selection bias and validates the reliability of the Heckman model. The results of this study recommend the need for institutional reforms in the supply chain, modernization of the cold chain and processing at the cooperative level, and price transparency based on digital technology to reduce the oligopsony of local collectors.]]>
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