An agribusiness focus has emerged in public discussions as way to enhance agricultural production in Indonesia and to improve sustainable income for farmers. The focus has led to increased attention on marketing. Marketing agricultural products via processing technologies can indeed address national objectives of rural poverty alleviation. REI-Indonesia observed that limited marketing alternatives are frequently mentioned by farmers as a significant constraint. In Indonesia, a significant amount of institutional support currently exists for the ideas presented in this paper. In particular, one should consider the multifaceted mission of agricultural development in Indonesia, which includes: (a) policies that encourage competition and, therefore, create welfare improvements; (b) the creation of new processing enterprises that increase competition; (c) the establishment of processing facilities that are owned and operated by farmer cooperatives; and (d) the utilization of government resources to assess processing technologies. Thus, the mission of agricultural development, as articulated by the Department of Agriculture, already encompasses in a broad way the specific agenda presented here. This paper provides the rationale behind a specific program that is directed toward mission goals.


Agribusiness | Agricultural and Resource Economics | Business

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