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Determinants Of Trust In The Indonesian Potato Industry: A Comparison Among Groups Of Potato Farmers

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  • Puspitawati, Eka
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    Indonesia’s potato industry is undergoing a rapid transformation, presenting producers with new and profitable opportunities to participate in sales to the modern channels. However, few farmers are involved in the new channels. This study offers an analysis of three groups of potato farmers’ perceptions of trust in their buyers. The aim is to understand the many different ways producers can enter modern chains and how different channels suit the individual characteristics of different producers. We surveyed 50 farmer field schools (FFS) producers, 60 Indofood suppliers, and 192 general potato farmers (GPF) in the largest potato producing area in Indonesia, West Java. Using MANOVA and linear regression methods, the study reveals that flexibility and dependence are determinate factors of trust in the three groups. Particularly among the FFS producers, relative price and firm size are factors identified to increase the farmers’ trust. Farmers contracting with Indofood establish the relationship with the firm in terms of reputation and flexibility. On the other hand, the GPF has more concerns about buyers offering price transparency and joint problem solving. This article provides a conceptual model and an empirical analysis of the buyer-seller relationship in the potato industry in Indonesia.

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    Paper provided by Australian Agricultural and Resource Economics Society in its series 2011 Conference (55th), February 8-11, 2011, Melbourne, Australia with number 100699.

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    Date of creation: 2011
    Handle: RePEc:ags:aare11:100699
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