Eastern Indonesia
Agribusiness Development
Opportunities (EI-ADO) - Chilli

Vegetable value chains in eastern Indonesia - a focus on chilli

sudo — Mon, 09 Feb 2015 09:35:52 +0000

White(2007)VegetableValueChainsEasternIndonesiaFocusChilli-ACIAR_SADI.pdf

Chilli is one of the main vegetables grown in Indonesia, with production increasing at an average rate of 20 per cent per year. This report presents the findings of a value chain analysis of the chilli industry in South Sulawesi, which was undertaken to determine market demand issues facing the vegetable industry in eastern Indonesia. The findings reveal that supply to supermarket gives the highest return to farmers, while the lowest value chain is the channel to traditional markets. Major issues facing the chilli market in South Sulawesi include low input and productivity, how to benefit from opportunities for value adding on the farm, lack of post-harvest or cold chain management, access to market development opportunities, and weak farmer bargaining power. The authors suggest there is a need to link smallholders to more dynamic markets such as channels to modern retailers and the food processing industry. They further suggest that farmers could benefit from technical assistance on efficient cultivation technology to increase productivity and the application of post-harvest handling.

Publication Date:

2007

Author:

White B., Morey P., Natawidjaja R. and Morgan W.

Publisher:

SADI-ACIAR Research Report. ACIAR-SMAR/2007/042. Australian Centre for International Agricultural Research

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Analysis of price volatility in the Indonesia fresh chili market.

sudo — Mon, 09 Feb 2015 09:35:52 +0000

Webb-Kosasih(2011)AnalysisPriceVolatilityIndoFreshChiliMarket.pdf

The extreme volatility of Indonesian chili prices has been a focus of government and public concern. This paper examines whether monthly chili prices over a 10-year period (2000 to 2009) for five cities on Java Island can be estimated with sufficient accuracy to make it economically feasible to build a short term storage activity into the chili marketing system. The findings show that in all locations prices respond to the previous month's price or relative prices. For Jakarta and Bandung, prices also respond to chili production levels in other key production areas, as well as seasonal fluctuations for Ramadan and October. Results also show that traders implementing a one-month cold storage strategy using forecasted prices could generate annual returns of 25 per cent over the cost of storage. The authors conclude that if the use of cold storage was more widespread, they would expect to see less volatile price movements in the fresh chili market. This would lead to lower risk premiums for traders and other middlemen and ultimately narrower farm-retail price spreads and a more efficient market for chilies. However, further research is needed to explore why cold storage is not being used more widely.

Publication Date:

2011

Author:

Webb A.J. and Kosasih I.A.

Publisher:

Paper presented to the Annual Meeting of the International Agricultural Trade Research Consortium, December 11-13, 2011, Tampa, Florida, USA

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Do chili traders make price volatility worse? A qualitative analysis of East Java trading practices

sudo — Mon, 09 Feb 2015 09:35:52 +0000

WebbEtAl(2012)ChilliTradersPriceVolatilityQualitativeAnalysisEJavaTradingPractices.pdf

In this paper, Webb et al. examine the trading practices of market intermediaries in the Indonesian chili market and how they affect the transmission of chili market information through their effect on prices. The research involves a series of structured interviews with chili traders and wholesalers to investigate five potential impediments to an efficient market: market structure impediments to competition; lack of scale economies; market intermediary value-added functions; post-harvest losses; and price risk premiums. This was followed by an analysis of vertical price transmission using monthly data for farm, wholesale and retail prices in the Kediri district of East Java. Results show a competitive market environment, only small post-harvest losses, and no stockholding at any level of the marketing chain. They also reveal that price margins in East Java are positively and statistically related to farm price levels. The authors propose two policy options to address the price volatility—imports of fresh chillies from other countries or government subsidized investment in cold storage facilities to reduce the amplitude of price fluctuations and give farmers more time to respond to tight market conditions.

Publication Date:

2012

Author:

Webb A.J., Kartikarsari F.G. and Kosasih I.A.

Publisher:

National Cheng Kung University: Taiwan

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Farmer-trader relationships in the Indonesian chilli markets: the role of relationship quality in modern and traditional supply chains

sudo — Mon, 09 Feb 2015 09:35:52 +0000

Sahara(2011)FarmerTraderRelationshipsIndoChilliMarketsModernTraditionalSupplyChains_AdelaideUni.pdf

In Indonesia, chillies are a priority crop commonly produced by smallholders and, like many other cash crops, several farmer-trader issues are emerging in chilli supply chains. Current literature suggests that improving relationship quality among food chain actors enhances efficiency. This paper contributes to this literature by examining chilli farmer's perceptions of relationship quality with their buyers, using trust, satisfaction and commitment as variables. The authors use data from a survey of 602 chilli farmers selling to the traditional market channel or supermarket channel in West Java. Chilli farmers were categorized into four clusters, with differing perceptions on relationship quality, price satisfaction and chilli production characteristics. The differences across clusters suggest that targeted strategies are required to optimize farmer-trader relationships. The main limitation of the article is that the study was restricted to farmers perspectives only, thus the authors indicate that further research needs to be undertaken that measures buyers perspectives in order to develop a more in-depth understanding of farmer-buyer relationships in chilli supply chains.

Publication Date:

2011

Author:

Sahara G.A., Stringer R. and Umberger W.J.

Publisher:

Australian Agricultural and Resource Economics Society (AARES) 55th Annual Conference

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Chilli (Capsicum spp.) Food Chain Analysis: Setting Research Priorities in Asia -Indonesia

sudo — Mon, 09 Feb 2015 09:35:52 +0000

MustafaEtAl(2006)IndonesiaChiliFoodChainAnalysisIndoSettingResearchPriorities_AVRDC.pdf

This study provides a comprehensive overview of the production practices, consumption habits, consumer preferences and distribution of chilli in Indonesia. Data was collected via secondary sources as well as interviews with key food chain stakeholders, including 306 chilli and non-chilli farmers from West Java, Central Java and East Java, as well as 16 market agents, 6 chili processors, and 289 chilli and non-chilli farmer housewives and 62 urban housewives. Key constraints identified by farmers were insect and pest losses (up to 63 per cent), difficulties in marketing and low yield potential. Analytical assessment of the different food chain levels highlighted several opportunities for improving chilli production and benefits for small farmers. Chilli production and income could be improved through the development of improved varieties for pest resistance, yield potential and incorporation of consumers' preferred traits (freshness, more seeds, attractive colour, pungency). Judicious use of inputs (fertilisers and pesticides) would contribute significantly to reduced production costs. Furthermore, price and negotiating power could be improved through collaborative marketing, farm level chilli processing and development of direct market links and information networks.

Publication Date:

2006

Author:

Mustafa U., Ali M., Kuswanti H.

Publisher:

In 'Chili (Capsicum spp.) food chain analysis: setting research priorities in Asia', ed. by M. Ali. Technical Bulletin No. 38. AVRDC

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Integration among regional vegetable markets in Indonesia

sudo — Mon, 09 Feb 2015 09:35:52 +0000

FirdausGunawan(2010)IntegrationAmongRegionalVegetableMarketsIndo_IPB.pdf

In this paper, the authors explore the level of market integration among regional vegetable markets in Indonesia and the movement of prices at the producer and wholesale market levels. Studying price integration among regions is important in order to increase the marketing efficiency of vegetables in the country. The main vegetables included in the study are shallots, large red chilli, potatoes, cabbage and tomatoes. The research uses secondary time-series data from 2001 to 2008 and analyses variables and integration using co-integration analyses. While results from the analyses vary as to whether producer prices do integrate with the reference market, they both indicate that the large red chilli commodity should receive more attention as market efficiency has not yet been reached. The authors suggest that government intervention, especially in the form of pricing policies, is needed both at the producer and consumer level to stabilize vegetable prices in Indonesia. However, the success of this intervention depends heavily on government's understanding of price transmission in the vegetable market. This research makes a solid contribution to this end.

Publication Date:

2012

Author:

Firdaus M. and Gunawan I.

Journal:

Journal of International Society for Southeast Asian Agricultural Sciences 18(2), 96-106

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