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Tomato Farmers and Modernising Value Chains in Indonesia

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  • Ricardo Hernández
  • Thomas Reardon
  • Ronnie Natawidjaja
  • Shobha Shetty

Abstract

The tomato value chain in Indonesia has transformed in the last two decades. We assess this transformation here, focusing on small tomato farmers in West Java and the determinants of their market-channel choices (as well as the technology correlates of those choices). These farmers sell to traditional village traders, urban and modern wholesalers, and supermarkets, and they have all invested heavily in irrigation and rely on external inputs. We find differences among farmers selling to different market channels. To wit, non-land assets--especially irrigation--are important to farmers participating in the supermarket, or modern, channel, but farm size affects modern-channel participation only in high-level commercial zones (zones dense in infrastructure and near highways). We also find that modern-channel farmers earn more profit than farmers in other channels but do not necessarily use chemicals more intensively. Yet hardly any farmers sell graded tomatoes; the main 'capture of rents' goes to specialised and modernising wholesalers.

Suggested Citation

  • Ricardo Hernández & Thomas Reardon & Ronnie Natawidjaja & Shobha Shetty, 2015. "Tomato Farmers and Modernising Value Chains in Indonesia," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 51(3), pages 425-444, December.
    • Handle: RePEc:taf:bindes:v:51:y:2015:i:3:p:425-444
    DOI: 10.1080/00074918.2015.1104649
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    References listed on IDEAS

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    1. Puspitawati, Eka & Guyau, Amos & Stringer, Randy & Umberger, Wendy J., 2011. "Determinants of Trust in the Indonesian Potato Industry: A Comparison Between Groups of Potato Farmers," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 29(1).
    2. Frantisek Brazdik, 2006. "Non-Parametric Analysis of Technical Efficiency: Factors Affecting Efficiency of West Java Rice Farms," CERGE-EI Working Papers wp286, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
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    Cited by:

    1. Keijiro Otsuka, 2021. "Strategy for Transforming Indonesian Agriculture," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 57(3), pages 321-341, September.
    2. Shinya Ikeda & Ronnie S. Natawidjaja, 2022. "The Sustainability of Contract Farming with Specialized Suppliers to Modern Retailers: Insights from Vegetable Marketing in Indonesia," Agriculture, MDPI, vol. 12(3), pages 1-11, March.
    3. Thomas Reardon & Lenis Saweda O. Liverpool-Tasie & Bart Minten, 2021. "Quiet Revolution by SMEs in the midstream of value chains in developing regions: wholesale markets, wholesalers, logistics, and processing," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 13(6), pages 1577-1594, December.
    4. Sara Ratna Qanti & Thomas Reardon & Arief Iswariyadi, 2017. "Triangle of Linkages among Modernising Markets, Sprayer–traders, and Mango-farming Intensification in Indonesia," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 53(2), pages 187-208, May.
    5. Kopp, Thomas & Salecker, Jan, 2020. "How traders influence their neighbours: Modelling social evolutionary processes and peer effects in agricultural trade networks," Journal of Economic Dynamics and Control, Elsevier, vol. 117(C).
    6. Alim Setiawan Slamet & Akira Nakayasu & Masahiro Ichikawa, 2017. "Small-Scale Vegetable Farmers’ Participation in Modern Retail Market Channels in Indonesia: The Determinants of and Effects on Their Income," Agriculture, MDPI, vol. 7(2), pages 1-16, February.

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