Challenges and Opportunities for Agribusiness Development: Lesson from Indonesia

Abstract

This study aims to determine the technical aspects of organic food systems in rice agribusiness and analyze the pattern of economic and institutional structures of agribusiness in East Java of Indonesia. Also, this study investigates the feasibility of farming and understands the strategies of rice agribusiness development. This study was conducted in several places in East Java of Indonesia, covering the district of Blitar, Kediri, Bondowoso, Tulungagung, and Malang. The data were collected through a structured questionnaire and focus group discussion. Furthermore, the data were analyzed using efficiency analysis, revenues analysis, and SWOT analysis. The findings indicated that, technically, the district of Bondowoso, Malang, Kediri, and Tulungagung had implemented the organic systems, while the district of Blitar applied under semi-organic systems. The pattern of economic institutions of agribusiness commodity consists of the production facility, farming, post-harvest and product processing, marketing, and support services institutional. These results showed that the organic rice farming is economically viable, and the government support was provided in the form of the establishment of development centers, the facilitation of agricultural machines, integrated crop management field school, and the organic certification. These findings suggest that several places in East Java have prospective opportunities for production of rice agribusiness development.