Fresh Chili Agribusiness: Opportunities and Problems in Indonesia

Open Agriculture

Indonesian chili faces some problems in increasing production, added value, and competitiveness of chili products, mainly in terms of quantity, quality, and continuity. The objectives of this study are (1) to analyze the private and social profitability of chili farming, (2) to analyze the chili competitiveness from both competitive and comparative advantage perspectives, (3) to examine government policy impact on chili performance, and (4) to formulate strategies to encourage chili development in Indonesia. The results of the policy analysis matrix revealed that chili farming in Indonesia’s production centers is profitable, both privately and socially. It also has competitiveness, both competitive and comparative advantages. The highest competitiveness occurs in Bandung district, West Java, with a coefficient of private cost ratio (PCR) of 0.416 and a domestic resource cost ratio (DRCR) of 0.269. Meanwhile, the lowest competitiveness occurs in Tabalong district, South Kalimantan, w...

2011

The AgroFood Company, which currently exports fresh chili peppers to European clients, desires to expand the product mix offered. The company, as it expands its production of fresh peppers for export, has an increasing supply of grade 2 peppers that are unmarketable in Egypt. However, an attractive market for processed frozen chili peppers exists in Europe. To expand their client base, capitalize on a value added product, and minimize product waste, the AgroFood Company desires to develop processing practices for chili peppers produced in Egypt. The AgroFood Company would like to identify its options in the processed pepper market. An analysis of the company, competition, consumer, market channel, and conditions, provides insight into possible solutions to the challenges faced by the farm management. Designed for undergraduate classroom use, this case will provide students with an opportunity to evaluate the merits of business expansion into a high capacity, automated mechanical processing facility for grade 2 vegetables.

International Journal of Agriculture System, 2017

Red chilli is one of basic commodities in Indonesia, in household consumption and raw material of industry even though the price of red chilli not only often fluctuates but also contributing to inflation. Policies taken by the government against the red chilli was with the application of the reference price, as the management of importation, for stabilizing the price of red chilli. This study aims to see the effectiveness of the reference price policy in influencing red chilli deals through red chilli import management and determine the factors that affect the red chilli deals in the effort to stabilize the price, using two stage least square (TSLS) simultaneous model with secondary data from Desember 2010-September 2016. In this study, red chili supply models in Indonesia consisted of five equations, four structural equations, and one identity equation. The structural equation consisted of red chili production, red chili import, red chili export, and red chili prices while the identity equation namely red chili supply. The results showed that reference price application had not been effective because it was not able to manage the importation properly, caused red chilli prices were still fluctuating. Implementation of reference prices did not significantly affect imports and prices, it indicated that the reference price policy was ineffective. This policy should be pursued by strengthening the development of production and to encourage red chilli farmers interest to increase the amount of production for continuity the supply side.

2013

Chapter 1 Introduction 1.1 Background 1.3 Research objectives and research questions 1.3.1 Research objectives 1.3.2 Research questions 1.4 Scope and limitations 1.5 Organizations of the paper Chapter 2 Concept of market integration and empirical evidence 2.1 The concept of market integration 2.2 Empirical studies on market integration, and factors influence the integration 2.4 The methods of testing price transmission and market integration Chapter 3 Overview of red chilli commodity 3.1 Supply characteristics of red chilli commodity 3.2 Demand characteristic of Red chilli 3.3 Red chilli commodity prices 3.4 Marketing channel of Red chilli commodity Chapter 4 Data and Methodology 4.1 Data 4.2. Selection of markets in producer level 4.3 Methodology 4.4 Analysis of factors generate market integration Chapter 5 Results and analysis 5.1 Result of market integration between producer markets and central market (PIKJ): Model 1. 5.1.1 Stationarity 5.1.2 Long-run and short-run dynamics v 5.2 Result of market integration across 23 producer markets: Model 2. 5.2.1 Stationarity 5.2.2 Long-run and short-run dynamics 5.3 Analysis results of factors that explain spatial market integration or the lack of integration 5.3.1 Discussion of factors that may explain market integration or lack of integration at model 1 5.3.2 Discussion of factors that may explain market integration or lack of integration at model 2 Chapter 6 Conclusion Conclusion Appendices References viii List of Appendices Appendix 1 Empirical evidence of market integration Appendix 2 Equation of Market integration analysis from first generation approach into the latest approach Appendix 3 Decision tree to conduct specification test before ADF test Appendix 4 Specification and lag determination for red chilli market integration model 1 Appendix 5 Graph of prices series include in model 1 in level and first difference Appendix 6 Specification and lag determination for red chili market integration model 2 Appendix 7 Graph of prices series include in model 2 in level and first difference Appendix 8 a t-statistic of residual from Engle and Granger cointegration results of red chili market integration model 2 Appendix 8 b t-statistic of residual from Engle and Granger cointegration results of red chilli market integration model 2 (continued) 100 Appendix 9a Long-run coefficient for all market pairs of red chilli market integration model 2 Appendix 9b Long-run coefficient for all market pairs of red chilli market integration model 2 102 Appendix 9c Long-run coefficient for all market pairs of red chilli market integration model 2 102 Appendix 9d Long-run coefficient for all market pairs of red chilli market integration model 2 102 Appendix 10a Short-run parameter for all market pairs of red chilli market integration model 2 Appendix 10b Short-run parameter for all market pairs of red chilli market integration model 2 106 Appendix 10c Short-run parameter for all market pairs of red chilli market integration model 2 106 Appendix 10d Short-run parameter for all market pairs of red chilli market integration model 2 106 Appendix 11a Speed adjustment of market pairs in red chilli market integration model 2 Appendix 11b Speed adjustment of market pairs in red chilli market integration model 2 Appendix 11c Speed adjustment of market pairs in red chilli market integration model 2 Appendix 11d Speed adjustment of market pairs in red chilli market integration model 2 Appendix 12 Description of factors influence market integration model 2 ix

AGROINTEK

Red chili is a horticultural product commonly used by people in their daily lives. Horticulture products have a long handling process until they reach consumers. The postharvest handling generally must be carried out are collecting, sorting, grading, packaging, transporting, distributing. This study was conducted to analyze the suitability of postharvest handling from each actor in the supply chain according to the standard operational procedure (SOP) of postharvest handling in red chili. This study used purposive and snowball sampling as the methods of selecting respondents. The percentage of the suitability of postharvest toward SOP was obtained with a simple data calculation. This study found that the supply chain of red chili in the Perbawati village of Sukabumi has two types of chains. Postharvest handling of red chili had done were sorting and packaging while another postharvest handling such as collecting, grading, cleaning had not done by the farmers. For the farmers and middleman handling practices compare to the standard operational procedure of postharvest red chili, was 45.56% of post-harvest handling that suitable with the SOP.

Chili is primarily used as spices or minor ingredients in various dishes, spice blends and sauces. The study was conducted in two chili growing districts, namely Jamalpur and Bogra to examine the postharvest losses and marketing performance of dry chili. The postharvest loss of dry chili was highest in agro-processing industry (BD Foods Ltd.), among farmers and traders level, such as faria, bepari, aratdar, paiker, retailer (dry), company agent, agro-processing industry (BD foods Ltd.), and retailer (powder) level which was Tk.2497per quintal due to dry loss, milling loss, and shortage. The study found that price spread was lower and producer share was higher in value chain-i then the value chain-ii. So value chain-i is more efficient than value chain-ii. Seasonal price variation showed that price of dry chili was found to be minimum in the month of May; it might be due to adequate supply in the market and maximum in the month of January which might be due to non-availability of dry chili.

CERN European Organization for Nuclear Research - Zenodo, 2022

This study aims to identify the main determinants and determine priority activities in the context of developing the red chili agribusiness system in North Sumatra Province. This research was conducted in North Sumatra Province which is the 3rd largest red chili producing centre in Indonesia. The data used are primary data derived from in-depth interviews with experts, local governments, academics, and practitioners related to the red chili agribusiness system in North Sumatra. Data analysis method using Interpretative Structural Modelling (ISM).The analytical method used :(a) analysis of net income is the difference between gross incomes minus total production costs. (b) Multivariate linear regression analysis to explain the effect of variable costs of seeds, fertilizers, pesticides, labour, mulch, to net income. Then the red chili development strategy in the region of North Sumatra Province is in quadrant 1 where it supports an aggressive strategy that describes a very good situation because it has opportunities and strengths, so it can be take advantage of existing opportunities, the strategies that must be implemented support the policy aggressive growth. In support of an aggressive growth policy, priority strategy that can be applied in agribusiness development efforts for chili farming in Indonesia attacking agropolitan districts is to implement the five strategies of agriculture, planting, using superior seeds and utilizing soil fertility and optimizing resources humans so that the production of limited resources and the attack of plant disease organisms can overcome. The results showed that there are 6 determining factors that have a strong driving force in the development of the red chili agribusiness system including production, increasing the capacity of extension workers, employment, price stability, land leases, as well as marketing agencies. Based on this, priority activities that have a strong driving force in the development of the red chili agribusiness system are increasing production, increasing productivity and quality of red chili commodities, increasing product down streaming, implementing Good Agricultural Practice (GAP) and increasing agricultural human resource capacity.

International Journal of Scientific & Technology Research, 2016

Research on the analysis of the factors that influence the demand for red chilli (Capsicum annuum L) in Solok and compliance efforts implemented in March s.d April 2016. The purpose of this study consisted of; 1) analyze the factors affecting the demand for red chili in Solok 2) analyze the elasticity of demand for red chili in Solok 3) know the effort that can be done to meet the demand of red chilli in Solok. To achieve the objectives of the first and second use secondary data for 15 (fifteen) years and to achieve the objectives, the third used primary data. The method used is descriptive analytical method, a method that is used to describe phenomena that exist, which takes place in the present or past. The variables were observed in this study is the X1 (price of red chilli), X2 (the price of green chili), X3 (onion prices), X4 (population), X5 (income) and Y (the number of requests red chili) which is then analyzed by multiple linear regression, elasticity of demand and SWOT. Th...

BIO Web of Conferences

This study delves into the supply chain intricacies of chili in Yogyakarta, a major determinant in recent inflation trends. Utilizing a quantitative approach, data were garnered from 53 key stakeholders encompassing farmers, traders, and auction market managers. The chili supply chain was delineated into four principal stages: farmers, assembly points, auction markets, and traders, underpinning three core flows - product, monetary transactions, and information dissemination. Noteworthy findings highlight an exemplary performance of the chili supply chain, marked by high responsiveness, agility, and commendable asset management efficiency. Interestingly, an intertwined price dynamic was observed: the Yogyakarta auction market's chili prices mirror those of the Jakarta market, and vice versa. The implications of these insights can be pivotal for devising strategies to ensure price stability and bolstering food security, emphasizing the potential role of auction markets as integral...

Chilli (capscicum annuam L.) is most widely used and universal spice of India. The study was conducted in Achalpur tahsil of Amravati district of Maharashtra in India.. Total four villages and twenty farmers from each village i.e.total 80 farmers were selected randomly as sample size. Data used were pertaining to the period 2009-10. Economic analysis of data indicated that Cost 'C' was found to Rs. 40541.72, Rs. 42811.07 and Rs. 53421.29 per acre for small, medium and large farmers respectively. Net returns over cost 'C' was Rs. 19329.52, Rs. 24114.79 and Rs. 21400.51 per acre and input-output ratio at cost 'C' was 1:1.48, 1:1.56 and 1:1.40 for small, medium and large farmers respectively.

E3S Web of Conferences

This study aims to describe the relationship structure of the red chili supply chain from Kulonprogo to Jakarta and analyze the supply chain management of red chili based on the Food Supply Chain Network (FSCN). A sampling of red chili farmers was carried out in stages, obtaining 80 people. Meanwhile, the sampling of chain actors after farmers used the snowball sampling technique, resulting in 68 people. The supply chain relationship structure of red chili was analyzed descriptively, whereas supply chain management of red chili was analyzed using an FSCN approach. The results revealed that the red chili supply chain structure was formed by three chains consisting of eight actors. All chain actors entered into an unwritten agreement, except for actors in the auction markets. The transaction system employed the scale and payment methods with a delay system. In addition, government support was only provided in the upstream sub-system. Supply chain collaboration that occurred was the mu...

Jurnal Perspektif Pembiayaan dan Pembangunan Daerah

The research objective is 1) To analyze the earning of farmer of chili at Dungaliyo Sub-District in Gorontalo Regency; 2) To analyze of using cost in production influenced at farmer's chili earning at Dungaliyo Sub-District Gorontalo Regency. The population is all of the chili pepper farmers in the sub-district Dungaliyo of Gorontalo Regency, wheter the sample is about 42 people. Descriptive analysis was used to analyze the earning of farmer of chili. Multiple regression model was used to analyze factors affecting income farming. The results showed that (1) revenue gained by chili pepper farmers in sub Dungaliyo Gorontalo district average Rp. 9166666.7 with value/ha Rp. 2.037,037.44 and the total cost is Rp. 4.233,961.905 with value/ha Rp. 940,880.2 net income of farmers of chili pepper Rp. 4,932,704.762 with value/ha Rp. 1,096,156,-(2) The results of multiple regression analysis showed that the cost of production facilities impact on farm income chili pepper in Sub-district Dungaliyo such as equipment rental costs and agricultural machinery (X1) the significant value <0.01 was highly significant, costs fertilizers (X2) the significant value <0.01 highly significant, Cost Drugs-drugs (X3) significant value <0.05 was significant, and the cost of seed (X4) the significant value <0.01 was highly significant in the farming chili pepper.

Open Agriculture, 2021

This study aimed to describe the relationship structure of the red chili supply chain based on actors and their activities and to measure the efficiency of the red chili supply chain using the Performance Measuring System (PMS) framework. The distribution of the red chili supply chain in this study began with farmers in Kulon Progo, Yogyakarta, and extended to consumers in Jakarta, Indonesia. The sampling technique was carried out in several stages for 132 respondents consisting of red chili farmers and consumers. The supply chain relationship structure was analyzed descriptively, while the efficiency of the red chili supply chain was examined using the PMS framework, including indicators of production costs, transaction costs, profits, and return on investment. The results revealed that the relationship structure of the red chili supply chain was formed by three chains consisting of eight actors: farmers, middlemen, wholesalers at the regency level, auction markets, Kramat Jati Cen...

Himalayan Journals, 2023

Chili commodities in the Indonesian market are known in various types, including large chili consisting of large red chilies and curly chilies and bird's eye chilies consisting of green bird's eye chilies and red bird's eye chilies (Rahmadani and Kusnadi. 2021). The demand for large chilies and cayenne peppers is inelastic, so their prices tend to be volatile. Of the various types of chili, cayenne pepper has a fairly large price fluctuation. Price is the main factor influencing farmers to increase production. Increasing the production of agricultural commodities including chili needs to be accompanied by improvements in the marketing system, so that farmers as producers are expected to be able to obtain an adequate share of the price for increasing their farming business. This study aims to analyze the development of production, consumption, prices, availability of cayenne pepper and price transmission of cayenne pepper in East Java. This research was conducted in East Java as a research location with the consideration that, looking at the data on cayenne pepper production at BPS Indonesia in the 2016-2020 period, East Java is the province with the highest cayenne pepper production for 5 consecutive years. The determination of the research location was carried out purposively. The analysis in this study uses trend analysis using the least squares method to determine the factors that influence cayenne pepper price fluctuations and cayenne pepper price transmission analysis, using a simple linear regression analysis method. The results of this study can be concluded production development. Consumption and availability of chili in East Java Province show a trend that tends to increase while prices show a trend that tends to decrease. The price transmission of cayenne pepper in East Java between farmers and retail traders is elastic, indicating that the price transmission of red cayenne pepper in East Java Province at the level of farmers and retail traders takes place in the same direction as the market structure that is formed, which is a perfect competition market.

2020

Nugroho, A. D., Prasada, I. Y. & Al Rosyid, A. H. (2020). The performance of the auction market of chili in the sandy coastal area of Indonesia. Bulg. J. Agric. Sci., 26 (6), 1100–1108 The performance of the auction market of chili has proven to have many benefits to the farmers in the sandy coastal area. However, not all of the auction systems have a good market performance. This research is aimed at knowing the performance of the auction market of chili in the sandy coastal area and its determinant factors. This research was conducted in Kulon Progo Regency from April to July 2018. The respondents were all managers of the auction market in the sandy coastal area. The analysis models used in this research are descriptive analysis and ordinary least square. The study showed that most of the auction markets did not have good market performance. Some of the problems faced by the auction markets occurred at the input and the process stage; since the markets had no legal entities, they ...