Traditionally, there has been no incentive for mango farmers to improve productivity and quality due to a weak bargaining position. This report analyses a transparent margin system (based on a collaborative partnership between the market supplier and a farmer group in Central Java) for enhanced smallholder involvement in the market chain. Methodology included interviews and focus group discussions with key market chain stakeholders, examination of farm to retail market marketing channels and cost benefit analysis of the supplier/farmer group partnership. The report contains an overview of the mango market and characterisation and analysis of the transparent margin system. Key observations of this system are that it provides farmer access to a modern market supply chain; farmer's market position enables contract based negotiation; necessitates farmer organisation for quality and supply continuity; and relies on farmer willingness and trust to make changes and reap benefits (higher price, guaranteed market, access to faster payment and market information). Replication of this system is achievable by providing incentives to the supplier. The report outlines policy considerations to assist in future replication.
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Natawidjaja R.S., Deliana T., Rusastra W., Perdana T., Napitupulu T.A., Sulistyoningrum H. and Rahayu Y.M.
Regoverning Market Innovative Practice Series, International Institute for Environment and Development