Markets for high-value commodities in Indonesia: Promoting competitiveness and inclusiveness

• Indonesian Centre for Agriculture Social Economic and Policy Studies, Indonesia
• Padjadjaran University, Indonesia
• University of Adelaide, Australia

After the Asian currency crisis of 1997 Indonesian policymakers liberalised foreign investment in the retail sector, allowing rapid growth in foreign-invested supermarket chains. As a result, the share of supermarkets and convenience stores in retail food sales rose from 22% in 2000 to 30% in 2004. This study will examine the transformation of selected high-value supply channels in Indonesia and their impact on farmers, wholesalers, and first-stage processors. The commodities are mango, mangosteen, chillies, shallot and prawns. Project researchers will examine the following research and policy areas for each commodity: changes in demand that drive the transformation of food supply chains; patterns in restructuring food supply chains; farmer participation in restructured value chains; and how to maximise the transformation of high-value supply chains. The studies will lead to an improved understanding of consumer preferences regarding food quality, food safety and related attributes in fruits, vegetables and prawns. Researchers will be better equipped to estimate the future growth of supermarkets based on current preferences for different retail food outlets among poor and rich households. The study will provide a more detailed and realistic view of the pace of transformation of horticulture and aquaculture marketing channels and its likely effect on small farmers.