Two distinct potato value chains co-exist across Indonesia:
- Potato for fresh consumption (ware potato), almost exclusively from the Granola variety; and
- Potato for the food processing industry, dominated by Indofood and the Atlantic potato variety.
Ware potato (Granola)
The study characterises in detail the existing traditional market chains that connect ware potato producers to markets in East Java and beyond. It includes non-traditional market chains such as those supplying supermarkets in Surabaya and elsewhere in East Java, and value chains for ware potato in Bali and other islands.
Processing potato (Atlantic)
The study investigates the production and marketing of Atlantic potatoes, paying particular attention to the arrangements between growers and industry, principally Indofood. The costs and returns are compared with Granola and other crop options.
The study also includes commentary regarding one cluster of SMEs producing potato crisps/chips, (kripik) in Batu, East Java, with a view to determining whether there is potential for interventions in this sector.
The recommended market-based solutions (MBS) interventions are:
- Piloting an existing but novel variety (Bliss) in the Batu processing cluster, based on seed tubers produced already by the farmer group in Malang district.
- Expanding seed multiplication and distribution systems in East Java, based on support to existing entrepreneurs (e.g. in Tosari, Pasuruan), with finance schemes to encourage poorer farmers to avail themselves of this input.
- Efficient use of agrochemical inputs, with development of market-based incentives if possible.
- Development of a contract potato production scheme associated with Indofood’s operations in Lombok (and potentially in Bondowoso, East Java).