Agrifood value chain assessment in developing countries: a case of Indonesia’s cashew sector

¹ School of Agriculture and Environment, Massey University, New Zealand and Agribusiness Department of University of Trunojoyo Madura, Indonesia
² School of Agriculture and Environment, Massey University, New Zealand
³ School of Food and Advanced Technology, Massey University, New Zealand

^* Corresponding author: dhidayat@massey.ac.nz/dwi.hidayati@trunojoyo.ac.id

Abstract

A value chain approach is increasingly used in the agrifood sector to help respond to the globalised food system. However, the agrifood value chain in many developing countries faces additional challenges to address any changes regarding the prevalence of smallholder players. Meanwhile, value chain studies are still limited in many developing countries, such as in Indonesia. Therefore, this paper aims to assess agrifood value chain in a developing country context. A qualitative methodology was applied in Indonesia’s cashew sector, specifically in the Sumenep Regency of Madura Island. A value chain mapping tool was used by focusing on governance (vertical-horizontal coordination and information flow) and value addition (safety, quality, and value orientation). The results showed that value chain mapping is a powerful tool to draw the complex interaction within the dynamics between different value chain actors. The exploration in Indonesia’s cashew sector showed that there is a gap in practices between actors in terms of governance and value addition. Therefore, it is recommended that smallholders’ governance participation and value adding activities be improved in order to minimize the gap of practises. The potential follow-up research is to address the maturity level of value chain practice to obtain a rigorous improvement route.