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STABILIZING THE WELFARE OF FARMERS AND REFINERS AS PART OF THE UPSTREAM ESSENTIAL OIL INDUSTRY: A CASE STUDY OF TWO ESSENTIAL OIL COMMODITIES
Alin Aun Adyana (a), Alberto Daniel Hanani(a)

Master of Management, Faculty of Economics and Business, Universitas Indonesia


Abstract

During 2011-2015, the export of essential oils increased from $580 to $637 billion, making Indonesia as the 12th largest suppliers. However, in the previous researches, problems faced by the industry include uneven organizations of farmers and the visible income gap of each essential oil supply chain. Moreover, farmers are faced with production risks, price fluctuations, and limited marketing channels. The purpose of this research is to examine a solution to stabilize the welfare of farmers and refiners as part of the upstream essential oil industry. We use case study method at two agriculture areas and obtained data through in-depth interviews and observations. The study shows that stabilization can be achieved through the paradigm approach that both farmers and refiners are entrepreneurs. Thus, suitable business models for both are generated. Second, there must be a linkage between farmers- production level and industry needs through agricultural cooperative so the production plan will always be aligned with the market.

Keywords: Agribusiness; Business Model; Cooperative; SMEs; Sustainable Business

Topic: Strategic Management

Link: https://ifory.id/abstract/QmGFCKXDnegb

Conference: The 3rd International Seminar of Contemporary Research on Business and Management (ISCRBM 2019)

Plain Format | Corresponding Author (Alin Aun Adyana)

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