000059822 001__ 59822
000059822 005__ 20180122212449.0
000059822 037__ $$a596-2016-40044
000059822 041__ $$aen
000059822 245__ $$aHigh value products, supermarkets and vertical arrangements in Indonesia
000059822 260__ $$c2005-03
000059822 269__ $$a2005-03
000059822 300__ $$a98
000059822 336__ $$aWorking or Discussion Paper
000059822 490__ $$aMTID Discussion Paper
000059822 490__ $$a83
000059822 520__ $$aIndonesian economy has experienced some major changes during the last three
decades and transformed from a predominantly agricultural economy to one that relies
more heavily on its non-agricultural sector. Within agriculture, there has also been a
change in the contribution of different sub sectors and high value products have grown
relatively rapidly making agriculture more diversified. Similar to the changes in
agricultural production, food consumption in Indonesia has shown a pattern of change
over the past three decades, from a diet characterized primarily by the staple foods of
cereals and cassava, to one that includes a larger share of fruits, fish, meats, dairy
products and processed foods. Alongside the change in composition of food demand,
newer forms of retail have also come up commonly known as supermarkets. However,
the emergence of modern retailing has other consequences that go beyond consumers. It
requires deep integration with farmers and can influence the production and transaction
costs at farm level. It can also influence the distribution of value among different agents
involved in production, intermediation, and retailing.
In this paper we pursue three interrelated objectives. First, we review the
structural changes that have taken place in Indonesian agriculture for the last three
decades and the state of high value products. Second, we examine the driving forces
behind the production of high value products and the constraints that limit their
production. Third, we review the emergence of supermarkets and the vertical
arrangements among farmers, traders/distributors, and supermarkets. We have relied both on primary and secondary data sources. Most of the secondary data has come from
government directorates, different ministries and the central bureau of statistics (CBS) of
the Government of Indonesia. In cases where secondary information was not readily
available, we have also collected primary data.
Our findings suggest that during the last three decades, there has been a
significant structural change in Indonesian agriculture and the production of high value
commodities and products –estate crops, livestock, fisheries, fruits and vegetables, and
floriculture – has grown faster than the cereals. However, the extent of diversification
towards high value products has remained limited to few regions and to few products
within each sub sector. Factors that have contributed most in diversification are the rapid
growth in income and accompanied changes in urban consumption in favor of high value
products and agricultural mechanization. The economic crisis that was triggered by the
currency crisis has had a long negative impact on agriculture sector
Structural changes in Indonesian agriculture have been accompanied by changes
in consumption pattern in urban areas in favor of high value products and by a major
change in retailing in the form of growth of modern supermarkets. To cater to the demand
of changed urban consumption needs, supermarkets have been integrating with farmers
through formal and informal contracts. This vertical relationship between farms and
supermarkets that has been emerging in Indonesia has been helpful to follow grades and
standards, to improve quality, and to reduce transaction costs and information
asymmetries. It has also been helpful to reduce price and production risks at farm level and to ensure a higher price for farmers compared to traditional value chain. However, it
seems that the participation of small holders in the vertical relationship depends largely
on vendors. Within the vertical chain, supermarkets appropriate a monopsony rent.
Important policies that can be drawn from this study are the greater emphasize on rural
infrastructure, user right of state-owned estate to smallholders, promotion of public-private
partnerships, encouragements of vertical arrangements, grades and standards, and
bringing up the modern retailing sector under the purview of regulatory oversights.
000059822 542__ $$fLicense granted by Janelle Andersen (ande9439@umn.edu) on 2010-03-26T18:58:31Z (GMT):

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000059822 650__ $$aAgribusiness
000059822 6531_ $$aDiet
000059822 6531_ $$aHigh value agricultural products
000059822 6531_ $$aSupermarkets
000059822 700__ $$aChowdhury, Shyamal K.
000059822 700__ $$aGulati, Ashok
000059822 700__ $$aGumbira-Said, E.
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  Previous issue date: 2005-03
000059822 982__ $$gInternational Food Policy Research Institute>MTID Discussion Papers
000059822 980__ $$a596