Unraveling Governance and Equity in Indonesia’s Robusta Coffee Value Chains: Insights from Malang Regency, Indonesia
DOI:
https://doi.org/10.25186/.v21i.2405Abstract
Despite the coffee sector’s importance to Indonesia’s agricultural economy, many of its smallholder farmers remain economically precarious. This study investigates the governance dynamics within the Robusta coffee value chain in Malang Regency, Indonesia, highlighting its predominantly market-based governance structure. Using Gereffi’s governance framework, this study employs a mixed-method approach, combining quantitative surveys with 72 key farmer informants (farmer group leaders) and qualitative in-depth interviews with 26 traders. The research reveals that despite farmers capturing approximately 86% of value-added, their economic security remains precarious due to price volatility and limited bargaining power, a situation reported by the key informants. A key methodological finding is the empirical inseparability of the ‘Information Codifiability’ and ‘Supplier Capability’ constructs, which
underscores the risk of implementing formal standards without holistically addressing farmer capacity. To address these findings, this study recommends strategic interventions, such as strengthening farmer cooperatives to enhance collective negotiation and establishing long-term buyer relationships to mitigate market instability. These findings offer practical insights for policymakers aiming to address governance and capacity gaps in Robusta coffee value chains, ensuring more equitable outcomes for smallholders and providing a model applicable to similar contexts globally.
Key words: Robusta coffee; market governance; smallholder farmers; transaction complexity; supplier capability.
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