RJOAS February 2025
by Shafriani Karimal Arum, Budiwati Nina, Rosni Masyhudah, Salawati Umi, Nisa Ana Fauziyatun (Study Program of Agribusiness, Faculty of Agriculture, University of Lambung Mangkurat, Banjarbaru, Indonesia)
The agricultural sector has a very important role in supporting the national economy. Indonesia as an agrarian country, which has great potential in developing the agricultural sector, including vegetable production. At this time, interest in organic agriculture in Indonesia continues to increase, in line with the increasing public awareness of the importance of health and food safety. The most widely consumed organic products by the public are organic vegetables. Seeing the great potential of agriculture, organic agriculture is still faced with various obstacles, especially in the aspects of production and distribution. The agricultural sector in South Kalimantan makes a large contribution to the GDP in South Kalimantan, which is 11.37%. The objectives of this study are: (1) Analyzing the risks that occur in the supply chain activities of organic vegetable products; (2) Analyzing the supply chain channels of organic vegetables in South Kalimantan. The benefit of this research for business actors is to look at the risks that may be accepted by them if they are involved as supply chain actors. This research was conducted in the city of Banjarmasin and the city of Banjarbaru. The results of the Analytical Network Process show that the most influential organic vegetable supply chain actor is the farmer (0.619), and the biggest risk priority is on production risk (0.333). The organic vegetable supply chain channel consists of farmers, middlemen and retailers.
The agricultural sector has a very important role in supporting the national economy. Its role includes efforts to realize food security, increase competitiveness, absorb labor, and reduce poverty levels. In addition, this sector also contributes to the development of agro-industry at the downstream level and encourages the export of agricultural products to increase the country's foreign exchange income (Ministry of Agriculture of the Republic of Indonesia, 2021). Indonesia as an agrarian country, which has great potential in developing the agricultural sector, including vegetable production. The horticulture subsector contributed 1.44% to GDP in 2022; this shows the importance of its role in the national economy (Ministry of Agriculture of the Republic of Indonesia, 2023). The growth of this subsector, especially in vegetable production, has a great opportunity to strengthen food security and increase exports. Supported by a tropical climate and optimal soil fertility, Indonesia has a competitive advantage in meeting the needs of domestic and international markets for vegetable commodities.
At this time, interest in organic agriculture in Indonesia continues to increase, in line with the increasing public awareness of the importance of health and food safety. Organic farming is a cultivation method that utilizes natural ingredients and avoids the use of synthetic substances. This approach aims to produce agricultural products, especially food, that are safe for the health of both producers and consumers, and environmentally friendly. Healthy lifestyles have become a global phenomenon that demands assurance that agricultural products must meet food safety attributes, have high nutritional attributes, and eco-labeling attributes. Healthy and nutritious food production can be achieved through the application of organic farming methods (Samodro and Yuliawati, 2018).
The most widely consumed organic products by the public are organic vegetables. Based on Indonesian Organic Agriculture Statistics which has been carried out for four consecutive years (2019-2022), organic vegetables is the choice of the public and occupy the top three positions in the consumption of organic products. The amount of organic vegetable production in Indonesia is presented in Figure 1 (David and Alkausar, 2023).
Seeing the great potential of agriculture, organic agriculture is still faced with various obstacles, especially in the aspects of production and distribution. Production risks include limited availability of quality organic fertilizers, high risk of pest attacks and diseases that are difficult to control without the use of chemical pesticides, and high dependence on weather conditions that are often unpredictable (Sukamto, 2014). Meanwhile, the organic vegetable supply chain still faces various obstacles related to distribution efficiency. These obstacles include limited infrastructure, high transportation costs, and low market access for smallholder farmers (Rachman et al., 2021).
Mishra (2012) states that efficiency in the supply chain as a whole refers to the management of performance relationships between supply chain members based on effective integration and coordination. Evaluation of supply chain performance has a very crucial role. Efficiency can be achieved through optimizing the use of resources owned by each member of the supply chain, thus allowing the creation of competitiveness both in terms of production costs and the quality of services provided. However, managing supply chain performance to stay efficient is a complex and challenging task.
The agricultural sector in South Kalimantan makes a large contribution to the GDP in South Kalimantan, which is 11.37% in 2023. The agricultural sector is also supported by the processing/manufacturing industry sector in South Kalimantan, which is the third largest contributor after agriculture in South Kalimantan's GDP, which is 10.75% in 2023.
Along with the potential for the development of marketing of organic products, especially organic vegetables in South Kalimantan, there are several things that are still a risk in the organic vegetable supply chain system, such as low productivity, low quality, instability of prices and supply, environmental & market risks, and various other factors. This possibility of risk must be borne by supply chain actors (Shafriani & Hartoni, 2021; Grinsven & Toledano, 2009). Risk is the opportunity for an event to occur that can cause losses if the event occurs in a certain period (Badariah et al, 2012; Darmawi, 2022; Arifuddin et al, 2020).
Based on this description, the objectives answered in this study are prepared, namely: (1) Analyzing the risks that occur in the supply chain activities of organic vegetable products; (2) Analyzing the supply chain channels of organic vegetables in South Kalimantan. The benefit of this research for business actors is to look at the risks that may be accepted by them if they are involved as supply chain actors. For the government, this research will be useful as a basis for consideration in planning policies. In addition, this research is also useful as a reference material for future research.
This research was conducted in the city of Banjarmasin and the city of Banjarbaru. The location of the research was chosen because as an area where there are many higher education institutions, there are many millennial populations active in the two cities. In addition, Banjarbaru City is the provincial capital, while Banjarmasin City is a city that is a municipality that used to be the provincial capital before moving to Banjarbaru.
Sampling is based on non-probability sampling where information and knowledge from experts is collected using the purposive sampling method to determine the experts involved in the research. The considerations used to determine the expert are the suitability of the expert's education, the expert's experience and the track record of his expertise. The number of samples used was 30 people consisting of farmers, intermediate traders and retailers. The data used in this is primary data obtained through in-depth interviews with the help of a list of questions compiled using Google forms and questionnaires.
To answer the first objective, namely what risks can occur in the supply chain activities of organic vegetable products, which are carried out by descriptive analysis. While the second objective is to find out which supply chain actors receive the most risk using Analytical Network Process (ANP) analysis.
According to Saaty (2005), ANP is an analytical tool that is able to represent the level of interests of various parties by considering the relationship of dependence both between criteria and subcriteria. The Analytical Network Process (ANP) method is used to calculate the weight of supply chain performance by paying attention to the level of dependence between groups or clusters (Amalia et al, 2012). The stage carried out in the ANP is that groups and elements to be compared are selected according to the control criteria. Use the fundamental comparison scale then perform a paired comparison with the matrix between the groups/elements to derive the vector eigens and to form a supermatrix. After all the paired comparisons have been made, then the priority weight vector (w) is calculated.
If the CI < 0.1 then the assessment is considered consistent. The numbers obtained from the results of the questionnaire of each respondent in the form of opinions about the interaction of interdependence between elements in each cluster are reduced to a supermatrix.
In general, the relationship of interest between elements in the network and other elements in the network can be described following the supermatrix in Figure 1.
Each column in Wij is a vector eigen, indicating the importance of an element in the ith component of the network to an element in the jth component. Some inputs that show zero relationships on elements mean that there is no interest in those elements. If this happens then the element is not used in pairing comparisons to deduce vector eigen. So what is used is an element that produces a non-zero value of interest (Saaty, 2005). The data processing in this study was carried out with the help of Superdecisions software.
To answer the second objective, which is to analyze the organic vegetable supply chain channel in South Kalimantan, using descriptive analysis. This descriptive analysis describes or descriptively describes the data that has been collected in accordance with reality.
The results of literature studies and previous research, as well as discussions and questions and answers with several competent experts, resulted in an ANP framework to identify risks that occur in the distribution channels of the organic vegetable supply chain in South Kalimantan. The structure of the ANP is a risk cluster and an actor cluster. The structure of the ANP is shown in Figure 2.
Based on the results of previous research and the results of observations and discussions with competent experts, in this study it was identified that there are six risk factors, namely:
- Quality Risk, is a risk caused by a lack of knowledge or errors in cultivation techniques, plant maintenance, harvest and post-harvest handling that do not meet procedures as well as uncertain seasons and weather;
- Production Risk, is a risk caused by the attack of plant pest organisms that cause a possible decrease in organic vegetable production;
- Price Risk is a risk caused by price fluctuations that are influenced by the price of competitors of similar products, oversupply, distortion of price and supply information, inflation, rupiah exchange rate and bank interest rates;
- Supply Risk, is a risk caused by the diversity of quality, harvest time, and that affects the amount of supply availability;
- Environmental Risk, is a risk caused by natural disasters and social, cultural and political conditions;
- Transportation Risk, is a risk caused by inadequate infrastructure, safety during transportation, uncertainty of delivery and long transportation distances.
Based on the results of the questionnaire using the Analytical Network Process (ANP) to determine the risk factors that are priorities in the organic vegetable supply chain.
The results of priority processing in ANP are presented in Figure 3.
The results of priority processing in Figure 3 show that the risk that has the most influence overall and is the top priority in the organic vegetable supply chain is production risk, which is 0.333. Production risk is the biggest risk that can be caused by the attack of plant pest organisms that cause a possible decrease in organic vegetable production.
Supply chain risk analysis is used to help understand the position of members in the supply chain so that it can increase competitive advantage. Risks are identified based on an assessment of pairwise comparisons between alternative risks to each member of the supply chain.
Based on the results of priority processing, production risk has the highest priority value of 0.536 so that production risk has an important influence among the other five risks that occur in farmers. Production risk is the most important risk that farmers receive; this can be caused by the attack of plant pest organisms which causes the possibility of a decrease in organic vegetable production.
Other risks have a weight value in a row, namely environmental risk of 0.196; price risk of 0.116; supply risk of 0.058; quality risk of 0.056 and transportation risk of 0.039. The CR value is 0.03216 which means that the assessment is considered consistent because the CR value is < 0.1.
Based on the results of priority processing, transportation risk has the highest priority value of 0.320 so that transportation risk has the most important influence among the five other risks that occur to intermediary traders. Supply risk is the main risk that middlemen receive; this can be caused by inadequate infrastructure, safety during transportation, uncertainty of delivery and long transportation distances.
Other risks have consecutive weighted values, namely supply risk of 0.304; quality risk of 0.187; environmental risk of 0.116; price risk of 0.049 and production risk of 0.025. The CR value is 0.01967 which means that the assessment is considered consistent because of the CR<0.1 value.
Based on the results of priority processing, supply risk has the highest priority value of 0.422 so that supply risk has the most important influence among the five other risks that occur in retailers. Supply risk is the main risk that collectors receive, this can be caused by the diversity of quality, harvest time, and which affects the availability of organic vegetable supply.
Other risks have a weight value in a row, namely quality risk of 0.306; price risk of 0.152; environmental risk of 0.045; transportation risk of 0.040 and production risk of 0.036. The CR value is 0.01626 which means that the assessment is considered consistent because the CR value < 0.1.
The results of the ANP processing of each actor and the most influential risks are presented in the form of a graph in Figure 4.
Based on the results of the questionnaire using the Analytical Network Process (ANP), a pairwise comparison between actors in the supply chain is obtained and will be seen who has the greatest influence. The results of priority processing in ANP are presented
in Figure 5.
The results of priority processing in Figure 5 show that the most influential actor overall and the most risky actor in the organic vegetable supply chain is farmers with 0.619. This is because only farmers bear losses if the production produced is small due to attacks by plant pest organisms or unpredictable natural factors such as natural disasters that cause crop failure, and generally farmers have not insured their agricultural land.
The ANP method used in the calculation of the comparison of problem weights, risks and actors in the organic vegetable supply chain has given the results that the main problem faced is ensuring stable product continuity, the main risk faced is production, and the most risky member of the supply chain is farmers. The ANP method was developed on the basis of the interdependence relationship between several components, therefore the components have an attachment to each other.
The structure in organic vegetable distribution channels in general has characteristics that are not too different from the distribution chain of vegetable products in general. The organic vegetable distribution channel applied in South Kalimantan in general through the distribution pattern shown in Figure 6.
Based on the results of the research survey, organic vegetables in South Kalimantan are sourced from farmers in the Kalimantan region itself, as well as outside Kalimantan (such as the Java island area). Organic vegetables at the farmer level are bought by intermediaries, both collectors and wholesalers, which are then sold to be distributed to retailers, both in the form of supermarkets, minimarkets and modern took/stalls. But in addition to the supply chain pattern, there are also farmers as producers who directly sell their organic vegetable products to consumers through modern took/stalls which are their own stores.
The risks identified in the organic vegetable supply chain consist of quality, production, price, supply, environmental and transportation risks. The Analytical Network Process results show that the most influential organic vegetable supply chain actor is the farmer (0.619), and the biggest risk priority is production risk (0.333). The organic vegetable supply chain channel consists of farmers, middlemen and retailers.
The researcher expressed his gratitude to the Institute for Research and Community Service (LPPM) of Lambung Mangkurat University for providing research funds through the Compulsory Lecturer Research Grant (PDWM) in 2024 with PNBP Financing of Lambung Mangkurat University for the 2024 Fiscal Year Number: 1090.123/UN8.2/PG/2024 dated June 3, 2024.
Original paper, i.e. Figures, Tables, References, and Authors' Contacts available at http://rjoas.com/issue-2025-02/article_03.pdf