Abstract
Strengthening the downstream of the agri-food chain holds a strategic part in enhancing the rural economy. This research was conduct to analyze the frontier production efficiency of cassava chip processing in rural. Then explore the opportunity to develop productivity enhancement of small-scale cassava chips SMEs. The research location referred to the cassava production centre in Lampung, which involved six District regions. Respondent was 60 small-scale cassava industries. Field survey had taken from February to April 2017. Analyzed data designed by the frontier production and binary logistic regression model. The production efficiency value of cassava chips SMEs achieved 61% on average. The achievement value still less than the optimum efficiency. The cassava chips SMEs still operated at a medium level of technical efficiency. Input combination is not optimum, and technology facilities even limited caused the production output not to reach the manufactured capacity the production run under the capacity production. Scale-up the production capacity is necessary. The introduction of the new technology equipment opens the possibilities in scale-up capacity production. The opportunity to adopt the new cassava processing equipment's strongly was affected by human resources skills and appropriate production equipment. The cassava SMEs technology application is significantly determined by experience and production equipment. Furthermore, the proper linkage between SMEs and university or research agencies is necessary to improve technology adoption. The current micro-credit scheme is also vital in provide adequate capital on scale-up production capacity. Keywords: cassava, efficiency, frontier, rural, SMEs
Highlights
Small Medium Enterprises (SMEs) play a central role in the structure of the Indonesian economy
Small-scale cassava processing in rural identified on the four levels based on their production capacity
The achievement value still less than the optimum efficiency (100%)
Summary
Small Medium Enterprises (SMEs) play a central role in the structure of the Indonesian economy. In 2019, SMEs were able to absorb 116,978,631 workers. This figure reaches 97% of the total Indonesian workforce (MSMEs and Large Units). Indonesian SMEs growth reached 64,194,057 units or 99.99% of the entire business units in Indonesia. The main factors that drive the growth of MSMEs in Indonesia include technology, information and communication facilities, and access to business capital. The existence of support from the government through various production and marketing stimuli affects the number of MSMEs' growth rate. This growth is considered slow due to the effectiveness and synergy of supporting factors facing various constraints at the practical level. The most crucial problem of SMEs is a capital restriction (38.84%) and marketing (25%) (BPS 2018)
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