Cocoa Agro-industry Development through the Role of Actors in Supply Chain in West Sumatra

Abstract

Supply chain management is crucial in meeting consumer demand for raw materials and finished products. Effective supply chain processes aim to distribute products efficiently and at the right time, place, and cost to meet all requirements at every level. In the cocoa supply chain, the roles of actors such as cocoa farmers, collectors, wholesalers, agro-industry, and exporters are very important. While the availability of cocoa in the upstream sector is essential for the long-term viability of the cocoa agro-industry, the uncertainty of cocoa prices for farmers can threaten its sustainability. To overcome this problem, this study aims to examine the role of each supply chain actor in the cocoa pricing system. Descriptive and qualitative research methods were used. Interviews with cocoa supply chain actors in Pasaman, West Pasaman, and Padang Pariaman Regencies provided research data sources. According to the research findings, the price-fixing method, cocoa at the farmer and trader level, has been used thus far as the value pricing method received by consumers, which means that the price is based on consumer perceptions of the value of the cocoa being sold. Agro-industry product pricing is based on markup costs for the products produced. Meanwhile, cocoa pricing for exporters is adjusted to reflect the current global cocoa price. So, it is necessary to have a government policy that regulates the role of supply chain actors in determining cocoa prices at the farm level to improve the welfare of farmers, thus ensuring the development of a sustainable cocoa agro-industry.