Business Partnerships Enhancing of Indonesian Agriculture Commodities in Global Value Chains: Trade Map and Sustainability Standards Analysis
Achmad Fadillah (a*)
a) School of Business (SB), IPB University (Bogor Agricultural University)
Jl. Raya Pajajaran, Bogor 16128, Indonesia
*achmadfadillah[at]apps.ipb.ac.id
Abstract
In the trade and business of agriculture commodities, global partnerships based on standards compiled by international NGOs is needed to achieve social, economic and environmental sustainability. However, the partnership by implementing these sustainability standard has not been fully effective in improving the performance of agricultural sector in Indonesia. In addition, the right business partnership strategy is needed to deal with global uncertainty in trade, industry and business of agricultural commodities. This paper aims to analyze the trade mapping of some important agricultural commodities peformance in Indonesia (Palm Oil, Coffee, Cocoa, and Tea) and the standards applied to these commodities (Rainforest Alliance - RA, Roundtable on Sustainable Palm Oil - RSPO, UTZ, Fairtrade International, 4C, Organic). The analysis demonstrated that in the Global Value Chain, Indonesian Palm Oil has followed the standards from Organic, RA, and RSPO. Indonesian Coffee has followed the standards from 4C, Fairtrade International, Organic, RA and UTZ. Meanwhile, Indonesia Cocoa and Tea have followed standards from Fairtrade International, Organic, RA, and UTZ. The performance rankings of the Indonesian commodity industry and trade in Palm Oil, Coffee, Cacao and Tea in the world were, first (with net trade 99.9), the 8th (with net trade 90.8), the 12th (with net trade 55.9), the 8th (with net trade 58.3), respectively. Based on the data analysis, the maintenance of Palm Oil business partnership scheme with current partner countries should be maintained and followed sustainability standards. Meanwhile, for Coffee, Cocoa, and Tea, it is necessary to increase the business partnership with other countries with potential markets and positive trading trend.
Keywords: Agribusiness; Commodities; Sustainability standards; Trade
Topic: Business Strategies on GVC Participation