Abstract
Vegetable crops play an important role in the Indonesian economy through their multiplier effect in farm household livelihoods. This paper analyses factors that determine farmers to commercialize vegetable-based agribusiness ventures. Intensive vegetable farming, as a part of agricultural commercialization, is considered a technological package that is more profitable, and high input and labor intensive compared to rice and other cereal crops. The study employed a qualitative approach to describe the farmers’ motivation. Data for this study were compiled from surveys conducted in 2014 by interviewing 357 farm households, which were located in four major vegetable producing regions of East Java and Bali, Indonesia. Qualitative surveys and descriptive statistics approaches were used to support the quantitative regression models. Results show that farmers were more motivated to commercialize because of economic and agro-ecological reasons. An enabling agribusiness environment such as access to good produce markets, credit, as well as market information and support systems access are expected to be other driving factors boosting commercial vegetable farming and associated steady growth of vegetable production in Indonesia. Vegetable markets should be emphasized in the potential vegetable producing regions of Indonesia.
Highlights
Agribusiness, which is based on vegetable production, is profit promising because vegetables are high-valued products
Data for this study were compiled from surveys conducted in 2014 by interviewing 357 farm households, which were located in four major vegetable producing regions of East Java and Bali, Indonesia
Since the important agribusiness of intensive vegetable farming as a part of agricultural commercialization in Indonesia, this study evaluates the motivating factors related to commercialization
Summary
Agribusiness, which is based on vegetable production, is profit promising because vegetables are high-valued products. Compared to rice and other cereal crops, vegetables provide high profitability if the vegetables are managed with a timely manner. Vegetables are daily demanded in fresh form, and the demand for the product is relatively stable. Many studies over the world have shown the business advantage of vegetable farming when farmers intensively operate farming for commercial purpose (Mariyono et al, 2017). Seeing that movement from subsistence to commercialized agriculture is the key point of agribusiness, the government should encourage smallholder farmers to participate in the marketoriented farming. The commercialization of smallholder agriculture is not an instantaneous process. Leavy & Poulton (2007) identify drivers of agricultural commercialization, i.e., population growth, technical change, enhanced market access, crop intensification, and asset accumulation. Poole, Chitundu, & Msoni (2013) highlight that
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