The Study of Inter-island Trade (PAP) of chilli commodities is carried out with the aim of analyzing trade performance, as well as formulating policy alternatives that support the development of chili commodities. The study was conducted in 2016 in Central Java, West Java and West Sumatra. The analytical method used is quantitative descriptive analysis related toPAP distribution patterns, policies on regulation, marketing networks and price transmission elasticity. The results showed that chilli production increased sharply in the province of West Java, while in Central Java, West Sumatra, Lampung and other provinces relatively slow increases due to disease problems and limited land. The stabilization of red chili production on the islands of Java and West Sumatra greatly determines price stability in other regions. Chili production in West Sumatra still does not meet demand, where the distribution of chili from DIY and Central Java to West Sumatra Province tends to increase more than the out-flow of chili from the province. The government has attempted to stabilize the price of red chili, maintain a balance between the regions of surplus and deficit, and minimize the price disparity between regions, but so far it has not been successful due to the constraints of low production so that demand is not met and high transportation costs. The development of an agribusiness station (STA) such as in West Java has not been effective in accommodating and marketing the results of farmers because marketing has been controlled by large traders who are capable of PAP.In general, several factors that make low prices and price fluctuations at the farm level are caused by the varying quality of products produced by farmers, increased production costs, information that is not symmetrical and low bargaining power by marketers. Java island because prices in Java determine prices in other regions, especially in Java, Sumatra and Kalimantan. Vertical coordination and marketing contracts can be used as a risk management tool for income and prices because there are provisions on the selling price for farmers AbstrakStudi Perdagangan Antar Pulau (PAP) komoditas cabai dilakukan dengan tujuan untuk menganalisis kinerja perdagangan, serta merumuskan alternatif kebijakan yang mendukung pengembangan komoditas cabai. Penelitian dilakukan pada tahun 2016 di Jawa Tengah, Jawa Barat dan Sumatera Barat. Metode analisis yang digunakan adalah analisis deskriptif kuantitatif terkait pola distribusi PAP, kebijakan terhadap regulasi, jaringan pemasaran, dan elastisitas transmisi harga. Hasil penelitian menunjukkan produksi cabai meningkat secara tajam di Provinsi Jawa Barat, sedangkan di Jawa Tengah, Sumatera Barat, Lampung, dan provinsi lainnya relatif lambat kenaikannya karena masalah penyakit dan keterbatasan lahan. Stabilisasi produksi cabai merah di pulau Jawa dan Sumatera Barat sangat menentukan stabilitas harga di wilayah lain. Produksi cabai di Sumatera Barat masih belum...