Addressing the Aggregation and Coordination Problems in Smallholder-based Value Chains
Smallholder production predominates in many areas of primary food production in Indonesia. Yet, outside of oil palm and poultry, contract farming is rare as are other forms of collective action or vertical coordination. Fragmented production and ma...
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| Language: | English |
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World Bank, Washington, DC
2019
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| Online Access: | http://documents.worldbank.org/curated/en/723591554284022235/Addressing-the-Aggregation-and-Coordination-Problems-in-Smallholder-based-Value-Chains http://hdl.handle.net/10986/31516 |
| Summary: | Smallholder production predominates in
many areas of primary food production in Indonesia. Yet,
outside of oil palm and poultry, contract farming is rare as
are other forms of collective action or vertical
coordination. Fragmented production and market interfaces
give rise to high transaction costs and problems in matching
supply with downstream or consumer requirements. Yet, there
is a growing body of international experience promoting
multiple models to help realize some economies of scale
within smallholder-based production systems and effectively
addressing the aggregation and market-matching problems.
These include different forms of joint farming operations,
shared services, farmer organizations, contracting
arrangements or partnerships with agro-enterprises, and
other models. Their suitability and need for public enabling
support varies depending upon the underlying circumstances.
This note synthesizes experiences, lessons learned, and
success factors with potential relevance for Indonesian
staple food crop and horticultural production. |
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