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Int. J Sup. Chain. Mgt
Vol. 8, No. 1, February 2019
Study on Stakeholders Position and Role in Supply
Chain of Cocoa Commodities
Muhammad Asir*1, Rahim Darma#2, Mahyuddin#3, Muhammad Arsyad#4
*
Graduate School of Agricultural Sciences, Universitas Hasanuddin Makassar, Jl. Perintis Kemerdekaan KM.10 Makassar
90245, Indonesia
#
Faculty of Agriculture, Universitas Hasanuddin Makassar, Jl. Perintis Kemerdekaan KM.10 Makassar 92045, Indonesia
1 muhammad_asir@polinas.ac.id
2 rdarma@unhas.ac.id
3
mahyuddin@agri.unhas.ac.id
4
arsyad@unhas.ac.id
Abstract ̶ ̶ ̶ The quality and continuity of cocoa beans supply
is determined really stakeholders in related to the cocoa
supply chain. In general, the activity of cocoa beans
production has not been efficient yet to compete as raw
materials for domestic and foreign industries. In order for
cocoa commodities in West Sulawesi Province can compete
and increase the income of cocoa farmers, so it is necessary
to increase the role of main stakeholders and to support the
cocoa supply chain especially those support the
improvement of cocoa beans productivity. The objective of
study is to analyse the position and role of stakeholder in the
cocoa bean supply chain. The method used to identify the
stakeholders’ position / structure is Interpretative Structural
Modelling (ISM) method, and the role of stakeholders by
survey method is to identify the cocoa bean supply chain that
becomes the object of research. The results of the study
indicate that famers are the most important stakeholders
who need to get the attention of other stakeholders in the
sustainability of the cocoa supply chain. Marketing
institutions (collectors, wholesalers, processing industries,
exporters), government / agricultural extension workers, still
have few roles in the supply chain of cocoa commodities. The
roles as expected of marketing institutions are partnership
especially price guarantees and costs support of increasing
farmers' garden productivity. The expected roles of
governmental extension institution, Non Governmental
Organization, college, and banking are to improve the
knowledge of farming management through intensive
assistance and the capital fulfilment of farmer through soft
loan facility, also determining the basic price (minimum
price) of cocoa bean among actors who is regulated for and
controlled by government.
Keywords— Stakeholder, Position and Role, Institution, Supply
Chain, Cocoa Commodity.
1.
Introduction
Stakeholders in institutional form are very important in
the development of agroindustry especially as media of
agricultural product innovation [6]. Stakeholder-oriented
institutions are very effective for creating dynamic
relationships in cross-sectoral partnerships and only
companies that interact with stakeholders can maintain
______________________________________________________________
International Journal of Supply Chain Management
IJSCM, ISSN: 2050-7399 (Online), 2051-3771 (Print)
Copyright © ExcelingTech Pub, UK (http://excelingtech.co.uk/)
sustainability [14, 21]. Based on the context of the
institutional review here are farmers, farmers’ group,
collecting traders, factories, government, research
institutions, extension agencies, financial institutions,
universities, media and agricultural equipment suppliers
An integrated supply chain will increase the overall
value of the supply chain. To meet the criteria of the
definition is required a coordination between the
stakeholders involved in the supply chain [4].
Coordination, integration and management of business
processes across all supply chain members / actors will
balance the level of profit and risk between the upstream
and downstream sides [26, 31]. Competition or imbalance
does not occur among members in the supply chain if
there is coordination and supervision of the support
stakeholders [22, 27]. That’s why, there needs the change
of supply chain partnership strategy between the main
stakeholders and the supporting stakeholders [1, 13].
According to [5] in order that the supply chain keeps
sustainable, it requires to increase the the involvement of
several institutions that can support the financial
strengthening and performance of the supply chain.
The results finding of Four Foundation and KPPOD
[30] in Majene District, farmers are still lack of awareness
to sell cocoa beans with certain drought standards.
Farmers buy agricultural facilities by credit to providers
who also work as collectors. Farmer’ group is not
maximized to strengthen the bargaining position of
farmers. There is no regulation that regulates the
production and standard of cocoa beans desired by the
entrepreneur or manufacturer. There is no direct market
access between farmers and manufacturers. Lack of
coordination and synchronization between stakeholders in
the program of productivity improvement and quality of
cocoa as well. Study of FAO stated that the development
of agroindustry requires a healthy response of supporting
institutions to optimize the potential in achieving supply
chain advantage and reducing risk [16].
In regarding to the supply chain on cocoa commodities
found that the main problem is to increase the
productivity and quality that’s hold a lot by farmers [2].
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Int. J Sup. Chain. Mgt
Vol. 8, No. 1, February 2019
Increasing of production and quality of cocoa can be done
through assistance / counseling and procurement of input
production with increasing role of government and private
institutions [24]. The policy of subsidizing the price of
fertilizer has a positive impact in increasing the
production volume and export of Indonesian cocoa [3]. In
addition, farmer organization (gapoktan) needs directing
in marketing and quality improvement of cocoa beans in
order to create a supply chain system that performs well
and is able to provide added value for farmers [18, 19].
The Government has made efforts to make various
policies in order to improve cocoa productivity, but the
policies and programs that have been implemented are not
fully integrated, efficient and effective [20]. In 2009,
Sulbar cocoa area decreased to 170,000 ha, which
triggered the spirit of West Sulawesi Provincial Governor,
H. Anwar Adnan Shaleh to return the glory of cocoa by
launching the National Movement for Production and
Cocoa Quality (Gernas Pro-Cocoa). However, Gernas has
not been successful in increasing productivity because
there are still many obstacles, especially on the
distribution of facilities or packages of assistance in
intensification, rehabilitation and rejuvenation activities,
such as fertilizers, pesticides, and harvesting equipment.
Gernas is getting failure because of lack of
synchronization among stakeholders so the position and
role of each stakeholder does not run well as expected.
Whereas Gernas is a national program that should
synergize all stakeholders. As [8] argued that the main
drivers of agricultural system changes in guarding the
policy framework are largely determined by the role of
stakeholders.
300
250
200
150
100
50
0
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
Mamuju (Ha)
Figure 1. The development of cocoa plantation
area in West Sulawesi.
Figure 1, shows that the development of cocoa
plantation area in Mamuju District, West Sulawesi gets
fluctuated and tends declined because af land conversion
in order to oil palm plantation and corn crops. The level
of productivity is very influential on the sustainability of
the supply chain. However, productivity improvement is
not enough yet, but it must be followed by improvements
in marketing channels (supply chains) [9]. One of the
improvements of the supply chain is to increase the value
received by farmers with strengthening institutions and
increasing the role of stakeholders, resulting in efficiency
and effectiveness of cocoa seed marketing to downstream.
Effective marketing is needed in marketing cocoa beans
to create price stability. The higher the selling price of the
cocoa, the farmers are more motivated to increase the
production. This study aims to identify the role of
stakeholders involved in the cocoa bean supply chain, so
resulting in a sustainable cocoa supply chain
recommendation.
2.
Methodology
This study used quantitative approach in order to ease the
process of analysis and interpretation by using descriptive
statistics. Research had been done for 6 months, since
August 2016 to January 2017. In general, this research
was conducted in three stages, i.e. data collection phase,
data processing stage and data analysis phase. The data
collection stage was begun with a series of discussions
with experts on understanding of stakeholders or
institutions involved in the cocoa bean supply chain.
The research was conducted in Sampaga and Kalukku
sub-districts of Mamuju District, West Sulawesi Province,
Indonesia. The determining of these two sub-districts
because these two sub-districts were main cocoa
producing location that represents West Sulawesi
Province and had a supply chain which was quite far
away. West Sulawesi province was the main source of
income due to land suitability with cocoa commodity, and
had ever been a centre of Gernas Pro-Cocoa Program.
The populations as respondents in this study were the
main actors of the cocoa supply chain (farmers, collecting
traders, wholesalers, exporters, and downstream industry
players) and cocoa supply experts (academics and
researchers). others respondent were chosen by purposive
sampling based on knowledge about cocoa and cocoa
beans supply chain amount 10 people (2 of each main
actors and academic / researcher).
Respondent of farmers because the population size is
huge, so the sampling technique used the technique of
Area (cluster) Sampling [29], that every sub-district
(Sampaga and Kalukku) 2 villages selected and each
village was selected 5 cocoa farmers who understood the
condition of crops and supply chain of cocoa beans, so
overall selected 20 cocoa farmers.
The data obtained consist of primary data and
secondary data. Secondary data was obtained through
relevant agency documents such as agriculture and
plantation agencies, Central Bureau of Statistics (BPS).
Meanwhile primary data obtained through several ways as
follows:
1. Field observation, which is to see directly the
activities of all actors in the supply chain of cocoa
commodities, ranging from producers (farmers),
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Int. J Sup. Chain. Mgt
Vol. 8, No. 1, February 2019
collecting traders, processors (processors / industries),
exporters to consumers.
2. In-depth interviews with farmers, actors or
stakeholders and experts to understand the positions
and roles of key stakeholders and supporters.
Stakeholders who were considered to be analyzed
(obtained from results of library identification and experts
opinion), i.e.:
1. Farmers / farmer groups
2. Merchant collectors
3. Big traders
4. Exporter
5. Downstream plant / industry
6. Government
7. Financial institutions (Banks, Cooperatives, etc.)
8. Extension agencies (offices, private sector,
NGOs)
9. College
10. Media information
11. Institute of agricultural equipment suppliers
12. Transportation provider
13. Agricultural means provider
Stakeholders in the cocoa supply chain are derived
from some of farmers' opinions as producers and
entrepreneurs in the cocoa supply chain. Analysis of
stakeholders’ positions and roles aim to; 1) determining
the position of each stakeholder, whether as a primary or
supportive stakeholder (secondary, tertiary), and 2)
knowing the role of stakeholders at each stage of the
cocoa commodity supply chain. So the results of this
analysis obtained which one of stakeholders have a strong
force in the process of supply chain business of
sustainable cocoa commodities.
Table 1. Comparison of agency interests involved
in the supply chain.
Marks
Descriptions
V
If the institution in the left column supports
institutional involvement in the right column,
but not in vice versa.
A
X
O
If the institution in the right column supports
institutional involvement in the left column,
but not in vice versa.
If the institution in the right column and the
institution in the left column support each
other of their involvement.
If there is no relationship between both
institutions in the right column and in the left
column.
Positions or relationships of stakeholders within the
cocoa supply chain will be obtained from some of
experts’ opinion in the ISM (Interpretative Structural
Modelling) method. This analysis is preceded with
determining the stakeholder variables which is analyzed
by the experts based on the concept developed by Saxena
(1992). Comparison of the interests of each stakeholder
by selecting the letters V, A, X, O as in table 1 above.
3.
Results and Discussion
3.1. The Position of stakeholders in Cocoa Supply Chain
Based on the results of research done then obtained data
about the type and role of stakeholders who support the
success of the cocoa bean supply chain in Mamuju district
West Sulawesi, as shown in table 2:
Table 2. Stakeholders who are involved in the
cocoa supply chain.
No
1
Stakeholders
Famers
Roles
Cultivator and provider of
cocoa bean.
2
Farmer groups
Media of discussion,
coordination among famers.
3
Colletor of Village
level
Direct purchase to famers’
house, drying.
4
Collector of subdistrict
Purchase to collector of
village level, drying.
5
Collector of district
Purchase to collector of
village/sub-district
according to world prices.
6
Wholesalers
Supplier of cocoa bean to
downstream and cocoa bean
exporter
7
8
Factory/industry
Government
Cocoa bean processor
Program or assistance
provider.
9
Regional
Agriculture Dept.
Support the production
improvement program.
10
Provincial
plantation
Procurement of agricultural
facilities.
11
Directorate of
plantation
To hold program of cocoa
& assistance from APBN,
PPL power provider,
training and coaching.
12
Banking
Credit provider (KUR).
13
Cocoa forum
(NGO and Private)
Assistance of famers
14
College/University
To support of research and
development of cocoa.
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Int. J Sup. Chain. Mgt
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Vol. 8, No. 1, February 2019
Transportation
provider
Transportation service of
cocoa beans among agents.
16
Agricultural tools
distributor/provider
To provide (sell) production
facilities are required by
famers, such as: pesticides,
fertilizer and agricultural
equipment (hoe, sickle,
machetes, scissor, hand
sprayer, saw, etc).
17
Media of
Information
Provider of price
information and cocoa
marketing.
The stakeholders shall provide good benefits for the
continuity of the cocoa bean supply chain if they are able
to run or to optimize their roles. The result of analysis
with Interpretative Structural Modelling (ISM) method in
related to the position of each institution will be described
as follows.
The structural model diagram of cocoa commodity
supply chain institute in Mamuju-West Sulawesi is shown
in Figure 2. The DP-D matrix of supply chain institutional
structures can be made based on Driver Power (DP) and
Dependence (D), the matrix shown in Figure 3.
E8
cooperation
E6 Government (Agriculture and
plantation Department)
E2
Colle
ctors
E3
Wholes
alers
E4
Ekspo
rters
E5
Indus
try
E7
Banki
ng
E9
Unive
rsity
E10
NGOs/
Facilita
tor
E11
Infor
matio
n
media
E12
Kios of
agriculture
tools
(Fertilizer,
pesticide,
tools)
E13
Transpo
rtation
Compan
y
E1 Farmers
Figure 2. Diagram of structural model of cocoa commodity supply chain institutional in Mamuju-West Sulawesi
Institutional structural diagrams showed that farmers
had a strong force in sustainability of the cocoa
commodity supply chain business process in MamujuWest Sulawesi. The farmers had a weak dependence on
other stakeholders in the supply chain (Figure 2). With
strong mobility and reliance with other weak stakeholders,
farmers are the principal actors or stakeholders to be
addressed in this supply chain.
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Int. J Sup. Chain. Mgt
Figure 3. DP-D matrix of cocoa commodity supply
chain institutional structure.
Figure 4. Interpretation Reachability of the final matrix
for institutional structure of cocoa commodity
supply chain.
Vol. 8, No. 1, February 2019
The handling of farmers as cocoa beans producers in
the cocoa commodity supply chain in Mamuju-West
Sulawesi is to increase the income by setting base prices
through partnerships with other cocoa commodities
(Figure 2).
Farmers are stakeholders who support the involvement
of collectors, wholesalers, exporters, industries, banking,
universities, NGOs, information media, and farming
kiosks. The stakeholders are the institutions in the cocoa
commodity supply chain in Mamuju West Sulawesi that
have great driving and dependency. The changes of these
institutions can affect the change of other institutions, i.e.
the government (agriculture / plantation Department). In
order to the sustainability of the cocoa commodity supply
chain, so the institutions must support the government
program. Programs / policies will work well if the
government establishes / strengthens the business
institutions at the farm level, such as cooperatives or
farmer groups (Figure 2). One of the main objectives of
institutional strengthening of farmers is as a media
partnership between farmers and traders, processing
industries also exporters.
[7], found that partnerships are not only between
groups or institutions but also between individual and
institutions, the goal is to distribute the resources among
partners for common prosperity. A prosperous farmer will
increase his ability in procuring production facilities and
technology both in quantity and quality, so the quality and
continuity of supply of cocoa beans are sustainable. [28], a
partnership with increasing the coordination among
government and private stakeholders can ensure cocoa
sustainability.
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Int. J Sup. Chain. Mgt
Vol. 8, No. 1, February 2019
3.2. Role of Supporting Stakeholders on Any Supply Chain Network
Input of
productio
Harvest & postharvest
Maintenance
Agriculture/Pla
ntation
Department
Trading
Manufacturing
Transportation
Provider
Banking
Universities
50jt
30jt 100jt
>500jt
Rp100/kg
Rp250/kg
Rp
15
0/k
g
Rp
30
0/k
g
Rp.27.200
s
Large trader
Rp.26.000
Rp.27.200
Rp.25.000
25.000
20%
50%
Rp.28.000
30%
Agricultur
e means
provider
Remarks :
Rp31.234
Collector at
Village level
Rp24.000
NGOs /
Facilitator
Small
industry
(Expoter
Agency in
Mamuju
Information
media
Certification
Bodies
Purchasing in
Makassar
Farmer
Collector at
District level
Rp.27.200
Purchasing
Unit
Exporter / Processor
Rp26.000
flow of goods
Flow of information
Flow of money
Figure 5. Main stakeholder relationships with supporting stakeholders in the cocoa commodity supply chain of West
Sulawesi.
Universities are also not optimal in providing information
Figure 5, shows that farmers only get support from
on the findings that are useful in improving the
some of external institution of agriculture, NGOs /
productivity of farmers' cocoa fields.
facilitators, colleges, certification bodies, and providers of
Cocoa farmers in Mamuju obtain the dominant loans
agricultural means. These institutions are also not optimal
from
village collectors (60%) and the rest from subin providing their support. Such as the Plantation Office
district collectors (20%) and wholesalers (10%), the rest is
only does counseling or mentoring to farmer groups when
self-expense. Cocoa farmers in Mamuju are more likely to
there is government assistance / program. NGOs /
obtain loans from village collectors because they are
facilitators only do counseling / mentoring to their target
easily accessible to farmers and partly because of family
group is still limited. The certification body also only
ties. The forms of loans provided by village collectors and
accompanies the farmers whose location is not far from
sub-district collectors to farmers are in the form of
the purchasing unit as the partner of the institution.
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Int. J Sup. Chain. Mgt
production facilities (fertilizers and pesticides) and cash
capital (money).
Supporting institutions or stakeholders that support
collectors (Figure 5). Such as providers of agricultural
facilities (fertilizers, pesticides and agricultural tools) as
partners of agricultural equipment procurement to meet
the needs of farmers with a loan system whose payments
will be cut at harvest season. Banking as creditor of cocoa
beans' purchase capital to farmers. The certification body,
as an institution to improve the quality of cocoa beans
with training on how to care the garden and treatment
after harvest. Providers of transport services, which assist
the distribution of cocoa beans to wholesalers or
purchasing units.
Village and sub-district collectors in Mamuju either
obtaining loans from banks or loans from wholesalers.
However, the source of the loan from the banking is more
dominant (50%) than the loan from the wholesalers
(25%), the rest is the cost itself. This indicates that village
collectors have been able to increase the capacity of cocoa
beans to farmers. Village collectors in Mamuju are
expected to shift into large traders located at farmers area,
so that the cocoa bean marketing chain can be shortened
to increase farmers' income.
In Figure 5, it indicates that wholesalers with
purchasing stations in sub-district and district are
supported by institutions or stakeholders, such as:
Banking, which provides support in the form of business
capital loans. Media information, as a provider of price
information and the needs of exporters and industries in
the country. Providers of transportation services, which
assist the distribution of cocoa beans to the purchasing
unit in Mamuju and Makassar.
Figure 5 shows that exporters of cocoa beans and large
processing industries that process cocoa beans into
powder, butter, liquid, and cake get support from
stakeholders such as: Banking, as a provider of loans.
Media information, as a provider of information on the
rupiah exchange rate and fluctuations in world market
prices. The certification body, as a certificate of quality
seeds and processed products ready for export. Providers
of transport services, which help the distribution of cocoa
beans or processed products to consumers.
Results of identification of stakeholders indicate that
there are 16 (sixteen) of stakeholders in related to cocoa
commodity supply chain in Mamuju District, West
Sulawesi. Based on the number of main tasks and
activities undertaken by these institutions or stakeholders,
only 6 (six) stakeholders have duties and functions as well
as direct linkages within each supply chain of cocoa
commodities (main stakeholders), ie farmers, collectors,
wholesalers , small (local) processing industries, large
processing industries, and purchasing units (exporters).
Stakeholders who should have the greatest influence in
cocoa supply chain activities are farmers and industry.
Vol. 8, No. 1, February 2019
Farmers as the main material providers (cocoa beans)
have not played roles well because the constraints to meet
the needs of facilities that support the improvement of
gardens due to pests and diseases of old age plants are still
minimal even none, especially from the government and
banking as a stakeholder support. The existing industry in
Mamuju-West Sulawesi is still small scale so the need of
cocoa beans is also still small. Large traders as large
industry representatives and exporters are also still buying
at the same price between fermented and non fermented
seeds.
The results of the analysis also show that financial
institutions / banking, transportation service providers,
provider of farming facilities, and information media are
instrumental in increasing efficiency and effectiveness of
supply chain of cocoa commodities. However, these
stakeholders have not gotten good support from the
government.
Government
and
Non-Government
Organizations (NGOs), universities still need to be
improved in supporting the supply chain of cocoa
commodities. Government policy support related to
capital loan has not been intensively socialized yet to
cocoa business actors. Improving the performance of each
key stakeholder of the cocoa supply chain, especially
farmers as cocoa seed producers should be supported by
the strength of financial capital. Therefore, it needs an
integrated support between the government and the
private sector to bridge the banking institutions in the
provision of soft loan facility to the farmers. Integrated
supply chain is able to increase the value generated by the
stakeholders involved.
Productive supply chain or
marketing activities create added value due to changes in
form, space, function and ownership [11]. To manage an
efficient supply chain, managers need to understand the
complex interactions of stakeholders involved in the
supply chain [23] of agriculture commodity. Just like [32]
found that the agricultural economic activity variable that
has the strongest positive direct effect on poverty
reduction is cocoa production, including agricultural
extension sustainability [30] in the country.
4.
Conclusion
The most important stakeholders who need to get the
attention of other stakeholders in the sustainability of the
cocoa supply chain are the farmers. Farmers have yet to
get appropriate supporting from stakeholders, particularly
government. Other stakeholders (collectors, wholesalers,
exporters, processors, banks, universities, NGOs,
information media, agricultural facilities providers,
transport service entrepreneurs) should support the
government in establishing business units or cooperatives
as farmers' organizations in meeting their needs,
especially the availability of farming capital.
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Int. J Sup. Chain. Mgt
Financial institutions / banking, transportation service
providers, agricultural equipment providers, and
information media are instrumental in increasing the
efficiency and effectiveness of the cocoa commodity
supply chain.
Government and Non-Government Organizations
(NGOs), universities still need to be improved in
supporting the supply chain of cocoa commodities.
Therefore, the policy operational steps that need to be
realized in cocoa agribusiness development is improve
the knowledge of farming management through intensive
assistance and the capital fulfilment of farmer through soft
loan facility, also determining the basic price (minimum
price) of cocoa bean among actors who is regulated for
and controller by government.
Acknowledgements
The authors are grateful to the Provincial Government
for Agricultural Services, West Sulawesi Province,
Indonesia for great support to this research. We also thank
to Faculty of Agriculture Hasanuddin University, and
anonymous referee for their contribution in reviewing
earlier draft of this paper, which is naturally strengthen
discussion.
Vol. 8, No. 1, February 2019
[8]
[9]
[10]
[11]
[12]
[13]
[14]
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Vol. 8, No. 1, February 2019