Value Chain Analysis of Organic Vegetables on Two Different Supply Chain Systems in Yogyakarta

Okgie Seto Prabowo,Pujo Saroyo,Dyah Ismoyowati

doi:10.18502/kls.v4i2.1667

Abstract

Recently, business of organic vegetables in YogyakartaYregion has been growing substantially. It is characterized by the formation of a new supply chain system called Jogjakarta organic market supply chain (POJOG) in addition to modern retail supply chain system that is already available i.e. Organic Farmers of Merapi (TOM). The different characteristics of these two supply chain systems allow the consumers to shift their preferences from modern retail supply chain to organic market supply chain when buying organic vegetables. Therefore, analysis of the performance and competitiveness of these two different supply chain systems is important for improvement of organic vegetable supply chain in the future. Based on the results of supply chain analysis, it was found that the added value obtained by modern retail supply chains TOM was 58.44%, while that obtained by organic market supply chain POJOG was 38.97%. The marketing margin ratio obtained by such players in modern retail supply chain system as farmers, TOM and Super Indo were 1.29, 1.91 and1.18 respectively, whereas those obtained by farmers and POJOG on the organic market supply chain were 2.10 and 1.29 respectively. In terms of marketing efficiency, Jogjakarta organic market performed better, accounting for 58%, more than double of those performed by modern retail supply chain that only accounted for 26%. Keywords: Value Chain Analysis; Organic Vegetables; Yogjakarta; Marketing Margin

Highlights

In Yogyakarta, the sale of organic vegetables has been growing substantially
Organic vegetables could only be found at some modern retails in Yogyakarta, i.e. at Merapi Organic Farmers (TOM), TOS and Freshland
By using value chain analysis, efficiency of supply chain systems, their interactions and opportunities for new producers or players to new as competitors can be predicted

Summary

Introduction

In Yogyakarta, the sale of organic vegetables has been growing substantially. In the past, organic vegetables could only be found at some modern retails in Yogyakarta, i.e. at Merapi Organic Farmers (TOM), TOS and Freshland. Modern retail offers higher prices because its selling system must follow a longer supply chain involving several tiers when compared to that of organic market supply chain. To measure performance of a particular product’s selling system, efficiency of each value chain activity in the supply chain system should be of concern [4]. In this case, efficiency of organic vegetable supply chain will affect formation of prices, which possibly leads to displacement or consumer’s shifting preferences from one supply chain system to another. By using value chain analysis, efficiency of supply chain systems, their interactions and opportunities for new producers or players to new as competitors can be predicted. This study was aimed to analyze the supply chain systems of organic vegetables through modern retail and organic market, determine the distribution of value chain for each supply chain player with indicators of value added distribution and the establishment of marketing margins throughout the supply chain of organic vegetable and analyse marketing efficiency obtained by each organic vegetable supply chain system

Objectives

Methods

Results

Conclusion