Clustering Of Small Agro-Processing Firms In Indonesia
AbstractSmall-scale industries in Indonesia provide more than 65% of total manufacturing employment. Sixty-three percent of small-scale firm employment is in firms that are clustered. A cluster is defined statistically in Indonesia as at least 20 firms in a village. For some agro-processing industries, such as bamboo plaiting, clustering does not involve interaction among firms; for others, notably the furniture industry, clustering firms make joint marketing efforts, subcontract each other, and share large orders. This article uses two recent case studies in the agro-processing sector Â– the furniture and the palm sugar industries Â– in Central Java. We argue that the target market of the industry (local or international) influences the nature of the contracts and other forms of interaction in the clusters. Targeting an international market requires formal contracts, more focus on marketing, and separate roles for finishing firms and subcontracting firms. Policy should be directed at enabling clusters to shift to the international market by improving contract enforcement regulations, vocational training, and providing opportunities for group lending.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by International Food and Agribusiness Management Association (IAMA) in its journal International Food and Agribusiness Management Review.
Volume (Year): 02 (1999)
Issue (Month): 03/04 ()
Agribusiness; Industrial Organization;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Schmitz, Hubert & Nadvi, Khalid, 1999. "Clustering and Industrialization: Introduction," World Development, Elsevier, vol. 27(9), pages 1503-1514, September.
- Reardon, Thomas & Pingali, Prabhu L. & Stamoulis, Kostas G., 2006.
"Impacts of Agrifood Market Transformation during Globalization on the Poor's Rural Nonfarm Employment: Lessons for Rural Business Development Programs,"
11572, Michigan State University, Department of Agricultural, Food, and Resource Economics.
- Stamoulis, Kostas G. & Pingali, Prabhu L. & Reardon, Thomas, 2006. "Impacts of Agrifood Market Transformation during Globalization on the Poor's Rural Nonfarm Employment: Lessons for Rural Business Development Programs," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25556, International Association of Agricultural Economists.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.