SUBTHEME 2.2 PARTICIPATION IN HIGH-VALUE AGRICULTURAL MARKETS
PROJECT 1: MARKETS FOR HIGH-VALUE COMMODITIES IN INDONESIA (In collaboration with the New Delhi office)
Project Duration: Objectives of project
Nicholas Minot, Bart Minten, Ashok Gulati, Maximo Torero, Reno Dewina July 2008 – July 2011
The overall goal of the project is to understand the effect of modernization of the processing and retail sector on the competitiveness of small farmers and to identify policies to maintain and expand farmers‘ participation in growing supply chains for high-value commodities. More specifically, the project has five objectives:
To identify the determinants of the changes in demand that drive the transformation of food supply chains. To examine and quantify the trends in the restructuring of food supply chains for high-value commodities. To improve understanding of the determinants and outcomes of the participation of farmers in modern market channels for high-value commodities compared to traditional market channels.
To identify policies and programs that would promote the competitiveness and inclusiveness of the transformation of high- value supply chains.
To build research capacity in Indonesian institutions.
Research Approach The project has four main activities:
A market chain analysis, using semi-structured interviews and structured surveys of traders and processors of selected high- value commodities to understand the differences between modern and traditional channels.
A survey of urban consumers to better understand their preferences regarding retail outlet, quality, and packaging of selected high-value commodities with the idea of relating preferences to household characteristics and estimating the rate of transformation.
A survey of farmers growing selected high-value commodities in order to understand the differences between those supplying traditional and those supplying modern channels and the constraints that farmers face in making the transition.
An active communication strategy to disseminate information on the objectives, method, findings, and policy implications. This strategy will include a web site, workshops, consultations with policymakers, and discussion papers.
The project concentrates on chilies, shallots, mangoes, and shrimp, based on these products‘ importance in Indonesian agriculture, the fact that these are priority commodities for both the Ministry and ACIAR, and the fact that each has both a modern and a traditional marketing channel. MTID researchers will focus on chilies and shallots, working with ICASEPS, an Indonesian research institute. NDO researchers, in collaboration with Michigan State University and another local research unit, CAPAS, will concentrate on mangoes and shrimp. The University of Adelaide will work with MTID and ICASEPS on the consumer survey.
Progress, Research Results, Major Research Findings, and Impacts or influence in 2010
In 2010, the project implemented three surveys. In March, the project implemented a survey of 500 chili growers in West Java. The survey included farmers producing for the traditional markets (wet markets), as well as a smaller number producing for supermarkets. The goal was to determine how those supplying to supermarkets differ in terms of initial assets, prices, and income, as well as obstacles to other farmers participating in growing modern-sector supply chains. In July, the project began a survey of 1000 shrimp growers in the provinces of Central Java and South Sulewesi. The questionnaire was designed to gather information about the level of technology and input use, as well as the level and type of commercialization of each farm. It will shed light on the differences between farmers supplying the modern channels and those supplying more traditional channels, as well as the process by which farmers ―graduate‖ to larger scales and higher technology. In October, the project launched a survey of 1200 urban consumers in three main cities of Indonesia: Surabaya,Bogor, and Surakarta. The questionnaire focused on food consumption patterns, shopping behavior, views and preferences regarding different types of food retail outlets, and questions about health and nutrition. The information will be used to measure the proportion of food purchased from supermarkets, identify the determinants of the use of modern retail outlets, and make projections about the growth of supermarket use over time.
2010 Internal Program Review-Markets, Trade and Institutions Division
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