PSYCHOLOGY AND EDUCATION (2020) 57(9): 298-305 ISSN: 00333077

Developing Sustainability Strategy for Organic Farming Using Analytical

Hierarchy Process
Sekar Wulan Prasetyaningtyas1, Agustian Budi Prasetya2, and Prita Prasetya3
1
Business Management - Master Program Binus Business School, Binus University, Jakarta 10271 INDONESIA
2
School of Business and Economics, Universitas Prasetiya Mulya, Jakarta 12430 INDONESIA
Email:1sekar.p@binus.edu

ABSTRACT
Organic farming in Indonesia is growing rapidly. market demand is very high but most organic farming businesses have not been able to meet
market needs. the main problem lies in the business strategy used, which has not yet led to sustainability. This research tries to formulate a
sustainable strategy that can be applied in organic farming in Indonesia. This research uses analytical hierarchy process to weight the available
alternative strategies. alternative strategies and influencing factors and actors were obtained from a meta-analysis of the organic agriculture
literature in Indonesia. Data collection was carried out through in-depth interviews with experts in the world of organic agriculture in Indonesia.
The weighting results shows that most important factor in developing sustainability strategy is the development of HR (0.269). The most
important actor that need to be involved in the development of the strategy is the agricultural manager (0.413), while the goal that need to be
achieved once the strategy is implemented is increasing farmers' income (0.372) and the highest weighting alternative strategy is product
innovation that has high added value and is responded well by the market (0.138).
Keywords
analytical hierarchy process, organic farming, pairwise comparison, meta-analysis, sustainability strategies.

Article Received: 10 August 2020, Revised: 25 October 2020, Accepted: 18 November 2020

Introduction level of small farmers. Some constraints can be described as

follows: (1) farmers do not pay much interest in organic
Indonesia as an agrarian nation has immense potential for farming; (2) farmers' lack of understanding of organic
natural agribusiness. The Central Statistics Agency (2018) farming systems; (3) there is no organization at the farm
states that Indonesia has 12 million hectares of land which is level which is an important key in organic farming
incidentally not developed yet. Hubeis et al. (2013) said that cultivation; (4) farmers' lack of partnership and
the likely pay of natural food trades from the 12-million- entrepreneurship; and (5) the sustainability of organic
hectare land is assessed at US $ 100 billion every year. All agriculture which has not been a focus for stakeholders
in all, the normal salary to be gotten from natural cultivating (Mayrowani 2015).
is around US $ 6,000 for every hectare. Regarding value, In terms of strategy making, Amekawa (2010) in his
natural items in the global market go from 5-10 times the research on agricultural strategies in developing countries,
cost of standard items. At a large-scale level, this can drive the mentioned the importance of including indicators of
economy. Notwithstanding financial advantages, the sustainability, especially on the scale of small farmers. Stefan
improvement of natural items is work concentrated, which is and Paul (2008) likewise stress that supportable arrangement
sourced from neighborhood possibilities that are changed in making can prompt improved relations with partners,
accordance with the conveying limit of the earth. The diminish input expenses,
formation of new openings has added to the social and and increment income through better access to business
monetary development of the rustic zones. sectors and the chance of various items and new advances.
The increasing area of organic vegetable fields in This research tries to offer a new concept of the stakeholder
Indonesia from 2007-2011 which experienced an increase approach in making a strategy, which according to Adebiyi
in area of more than 180,000 hectares, identified the (2014), the approach is very effective to be used for making
growing number of consumer demands for organic agricultural development strategies in developing countries.
vegetables (Priastuti et al. 2014). Market aspects of organic In addition, this research emphasizes the concept of
horticulture products in Indonesia are also still relatively sustainability which is an important indicator in strategy
wide open from various market segments. On account of the making (Fadlina et al. 2013).
local market, interest for natural agricultural items will in Analytical Hierarchy process is used to quantify and weight
general increment. The agricultural market in Indonesia is the indicators for the sustainability strategy. It was created
extremely huge and shows an expanding pattern alongside by Saaty (1990) and has been generally applied in
the expanding pace of populace development (Chrysanthini application areas, including to decide research needs
et al. 2017). (Braunschweig 2000), credit assessment (Xu and Zhang
The picture of this country is important to see the current 2009), appraisal of natural manageability (Kara and Köne
situation of organic agriculture, especially horticulture in 2012), choice help for spatially focused on arrangements
Indonesia. Indonesia began constructive development of (Gerber et al. 2008), item venture screening (Chin et al.
organic agriculture in 1980. However, there are still many 2008), choosing an organic pointer for a waterway stream
obstacles in the development of organic agriculture in reclamation (Huang et al. 2013), Water quality evaluation
Indonesia. In detail, the obstacles are mostly found at the (Carbajal-Hernández et al. 2013), positioning the markers of

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building execution and the clients' hazard (Khalil et al.

2016), foundational relative appraisals (Parra-López et al.
2008) and vital dynamic (Bhushan and Rai 2007). The main
goal of this study is to quantify and weight the indicators
used to build the sustainability strategies in organic farmin
in Indonesia.

Literature Review
Organic Farming
Picture 1. Hierarchy of Categories (Kukrety et al. 2013)
The philosophy that underlies organic farming is the principle
of feeding the soil, which in turn provides the soil with food
Pairwise Comparison
for plants (feeding the soils that feed the plants), and not
directly feeding the plants. Natural cultivating as per the
Pairwise comparison is utilized to decide the general
International Federation of Organic Agriculture Movements
significance of every marker. The appraisal was performed
(IFOAM 2016) is an all-encompassing and incorporated
by leaders who were specialists in the field and who have an
farming creation framework, by advancing the wellbeing
enthusiasm for it. Appraisal of markers and choices permit
and efficiency of agro-environments normally, in order to
dynamic about the relative significance between two
deliver sufficient, quality, and manageable food and fiber.
components in a single level corresponding to the level above
Natural cultivating is an all-encompassing cultivating
it. This is finished utilizing a rating scale (size of 1 to 9
framework that bolsters and quickens biodiversity, organic
notwithstanding reverse qualities). The pairwise correlations
cycles, and soil organic exercises.
have two standards:
Identified with the use of natural agribusiness in Indonesia,
1. The need of each factor comparative with itself is
Lumbanraja (2013) expressed the significance of procedure
equivalent to 1.
in the use of the natural way of thinking. The procedure
2. If the need of factor A to factor B is equivalent to I,
received in natural cultivating is to move supplements rapidly
at that point the need of factor B to factor A ought to be
from crop deposits, fertilizer and compost into soil biomass,
equivalent to 1/I.
which after experiencing the mineralization procedure will
become supplements in the dirt. At the end of the day,
supplements are reused through at least one phases of the Material And Methods
type of natural mixes before they are consumed by plants.
This is entirely unexpected from customary farming which Data was collected through in-depth interviews with experts
gives supplements rapidly and straightforwardly as an consisting of Deputy Coordinating Ministry for Food and
answer, so it is promptly caught up with the sum and time of Agriculture, Director General of Horticulture, Expert Staff of
organization as per plant needs. the Ministry of Trade, Chair of the Indonesian Organic
Alliance and owners of organic farming businesses in
Analytical Hierarchy Process Indonesia, from January to July 2019.
The process of preparing a hierarchy consists of three
Analytical Hierarchical Process (AHP) is utilized as a stages, namely (1) identifying the overall objectives of
dynamic device for the distinguishing proof of reasonable making a hierarchy or commonly called a goal or focus, (2)
natural cultivating locales. AHP was created by Saaty determining the criteria needed or in accordance with the
(1990), for setting-up a various leveled model dependent on overall goal or focus, (3) identifying alternatives which will
standards and options for speaking to the intricate issues be evaluated under sub-criteria (Permadi 1992).
(Roig-Tierno et al. 2013). As a multicriteria dynamic The sustainable strategy structure of organic agriculture is
strategy, the AHP has been applied for taking care of a wide organized into five levels of hierarchy and the arrangement
assortment of issues that include complex models across is based on interrelated matters and is very important in
various levels, where the connection among measures is achieving focus. Prasetyaningtyas et.al. (2019) in her meta-
normal (Feizizadeh et al. 2014, Tiwari et al. 1999). analysis of organic farming literature in Indonesia shows 5
AHP is a strategy that manages multi-rules dynamic and level of important indicators. These levels consist of: (1)
considers the interest of a few partners. Garfì et al. (2011) The first level is determined as the goal or focus to be
featured multifaceted perspectives in AHP, believing it to be concentrated, namely the sustainable strategy of organic
a suitable instrument for the advancement of tasks focused agriculture in Indonesia, (2) The second level is determined
on strategies to improve expectations for everyday comforts as a factor consisting of four things that are important for
in creating nations; AHP is basic, adaptable, and sustainable strategies of organic farming, i.e. improvement of
straightforward to members, and spotlights on the human resources, capital, product innovation, and
requirements of recipients. To avoid confusion with many agricultural management models, (3) The third level is
comparisons, which significantly increases, it is determined as an actor consisting of four actors involved in
recommended that the number of elements in a category the sustainable strategy of organic agriculture, namely the
must not exceed 10 (Kukrety et al. 2013). owner of agriculture, the Foundation, the Regional
Agricultural Service, and the Indonesian Organics Alliance
(AOI), (4) The fourth level is determined as the goal in

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achieving the development strategy, which consists of four Discussion

objectives, namely increasing farmers' income, guaranteeing
commodity prices, expanding the distribution / market Table 1 shows a factor that has a high level of priority in
network, improving water, soil and air quality, (5) The fifth sustainable organic farming strategies is HR development
level is set as an alternative strategy can be used in with a weight of 0.563. The next factor is capital, agricultural
achieving goals or focus, which consists of nine strategies. management models, and product innovation.
The hierarchy structure of sustainable organic farming The HR Improvement Factor is a priority because the
strategies can be seen in Fig. 1. successful organic horticulture business is supported by
adequate HR. The number of active farmers who are
Alternative Strategies for Sustainable Horticultural members of various sustainable organic farming sites in
Organic Business in Indonesia Indonesia is currently less than 20, some even have only five
farmers. This amount is felt to be very lacking, given the
Alternative strategies are the strategies obtained from the huge market potential that will require organic farming to be
results of meta-analysis that support the success of the able to produce organic horticulture in accordance with
sustainable strategy focus on organic farming in Indonesia. consumer demand. If the farmers involved are still very
The alternative strategies consist of nine strategies: lacking, while the demand from consumers increases, it will
1. Innovating high value-added products and result in a lot of organic horticulture demand that cannot be
responding good by the market fulfilled. HR improvement is not only seen in terms of
2. Using a product traceability system on the quantity, but also the quality (knowledge and skills)
packaging so consumers can trace the product if there is a possessed.
problem with the product The capital factor occupies the second priority because in
3. National Certification or Indonesian Organic running this organic vegetable business, most organic
Quality Assurance (PAMOR) as an alternative to expanding farming owners use private capital, it does not rule out the
marketing possibility of agricultural owners, also requires additional
4. Digital marketing capital to develop this organic vegetable business. The
5. Building a network of cooperation with organic capital obtained can be obtained from loans from financial
communities institutions, so it is expected that farmers can collaborate
6. Utilizing training and coaching programs organized with the Regional Agriculture Office to be able to get
by the Department of Agriculture to conduct financial capital. The capital obtained can later be used to improve
management training and business negotiation strategies, advice and infrastructure in the process of producing organic
administering improved knowledge of farmers and staff HR vegetables.
in terms of utilizing production technology
7. Utilize association’s assistance program in The Actor's Element
increasing the knowledge of human resources in the use of
technology to deal with pests and climate attacks and erratic Based on the results of the vertical processing showed in
weather Table 2, the main actors should be involved in developing
8. Opening new business lines (agritourism) sustainable organic farming strategies in Indonesia are the
9. Open farm management system. Agricultural Owners (0.413), the second actor is the
Simultaneously with the AHP questionnaire, researchers Foundation (0.280), the third actor is the Indonesian Organic
applied another questionnaire arranged in the form of closed Alliance (0.178) and the last actor is the Department of
and open questions for each family farmer to establish a Agriculture (0.139). The role of the Agricultural Owner in
socioeconomic profile and collect farmers' opinions about an organic farm is not only as a product quality assurance
the organic industry and activities in the region. Before agency, but also as a product marketing institution.
proceeding with the interview, informed consent was
obtained from each participant. The Objective’s Element

Results Based on the result shown in Table 3, the main objective in

making strategies for sustainability of organic agriculture in
All participants utilized verbal scales to make subjective Indonesia is to increase farmers' income (0.371), the second
examinations, which were changed to quantitative qualities goal is to increase the market (0.238), the third objective is
utilizing the major scale Saaty (1990). Utilizing a to guarantee commodity prices (0.212) and the final goal is
convenient PC during hands on work, appraisals acquired an increase in the quality of water, air, soil (0.189). Increased
from pairwise correlations are gone into the AHP Excel income of farmers is an indication that the development of
Template, created by Goepel (2013) to discover nearby organic vegetable business has been going well. The
needs. Consistency proportions (RK) equivalent to or existence of certification from the Organic Food
underneath 0.1 are checked for all appraisals. The outcome Certification Institute and the existence of its own label is
can be found in the Fig. 2. expected to be a high enough added value for the products
produced, so that the welfare of farmers can increase,
especially farmers' income.

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The Strategy Elements this increase in income is an indication of whether the

organic horticulture business that has been carried out has
Based on the results of the synthesis of an alternative weight gone well, or not.
assessment carried out using Excel AHP (Table 4), the main 4. The alternative level of strategy
alternative strategy is Strategy 1, which is innovating high The most important strategy to consider in developing an
value-added products and responding well to the market organic vegetable business is product innovation that has
(0.138). The second alternative is Strategy 3, which is the high added value and is responded well by the market
granting of national certification and PAMOR to expand (0.138).
marketing (0.136). The third alternative is Strategy 5, which
is building a network of cooperation with organic Conclusion
communities (0.121). The fourth alternative is Strategy 8,
which is opening a new line of business (agritourism) The Hierarchy Analysis Process (AHP) produces the highest
(0.108). The fifth alternative is Strategy 4, namely digital factor weighting is the development of HR (0.269); The
marketing (0.105). The sixth alternative is Strategies 6 and actors who have the highest weight are the agricultural
7, namely Utilizing training and coaching programs manager (0.413); The goals that have the highest weight are
organized by the Department of Agriculture to conduct increasing farmers' income (0.372) and the highest weighting
financial management training and business negotiation alternative strategy is product innovation that has high
strategies, administering increased knowledge of farmers and added value and is responded well by the market (0.138).
staff HR in terms of utilizing production technology
(0.104), and Utilizing AOI assistance programs in increase Acknowledgement
human resource knowledge in terms of the use of technology
to deal with pests and climate and erratic weather (0.104). This work is supported by Research and Technology
The seventh alternative is Strategy 2, which uses a product Transfer Office, Bina Nusantara University as a part of
traceability system on the packaging so that consumers can Bina Nusantara University’s International Research Grant
trace the product if there is a problem with the product entitled ―SELECTION OF ORGANIC AGRICULTURAL
(0.093). The eighth alternative is Strategy 9, the Open BUSINESS STRATEGY USING ANALYTICAL
Farm Management System (0.088). HIERARCHY PROCESS (AHP) with contract number: No.
The results of the vertical processing which is an 025/VR.RTT/IV/2020 and contract date: 6 April 2020.
amalgamation of the assessment of expert experts
(respondents) described above can be used as information
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Fig. 1. AHP hierarchy for sustainability strategies in Indonesia

Fig. 2. AHP result for sustainability strategies in Indonesia

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Table 1. The weight and priority of the factor towards focus

Factors Weight Priority
HR Improvement 0.563 1
Capital 0.212 2
Product Innovation 0.103 4
Farming Managerial Model 0.121 3

Table 2. The weight and priority of the actor towards the focus
Actor Weight Priority
Owner 0.413 1
Foundation 0.280 2
Department of Agriculture 0.178 3
Indonesian Organic Alliances 0.139 4

Table 3. The weight and priority of objectives towards the focus

Objectives Weight Priority
Increased farmer income 0.317 1
Market Expansion 0.238 2
Commodity Price Guarantee 0.212 3
The quality of air, water and soil 0.189 4

Table 4. The weight and priority of alternative strategies towards the focus
Strategies Weight Priority
Strategy 1 0.138 1
Strategy 3 0.136 2
Strategy 5 0.121 3
Strategy 8 0.108 4
Strategy 4 0.105 5
Strategy 6 0.104 6
Strategy 7 0.104 6
Strategy 2 0.093 7
Strategy 9 0.088 8

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