Strategic Study On Cluster Strengthening To Support The Supply Of Volatile Food Commodities

Yunita R. Sari (), Noviarsano Manullang, Nurchair Farliani (), Melia Oktarina (), Fauzan Rahman (), Akhmad Jaeroni, Chaikal Nuryakin and Hamdan Bintara
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Yunita R. Sari: Bank Indonesia
Nurchair Farliani: Bank Indonesia
Melia Oktarina: Bank Indonesia
Fauzan Rahman: Bank Indonesia

No WP/8/2015, Working Papers from Bank Indonesia

Abstract: the main contributor to inflation comes from volatile food commodities whose price movements are highly influenced by seasonal factors. The supply of food commodities is affected by the disruption of production, distribution, and government policy. When there is disruption to production, the supply of commodities is unable to meet demand. he program to develop clusters was a form of Bank Indonesia’s participation in safeguarding supply in order to control the price movements of foodstuffs. The emergence of lusters is expected to raise productivity from commodities by managing clusters using the value chain approach (value chain). The study was conducted to understand and improve the role of clusters in supporting the supply and controlling the prices of volatile food commodities. The study was conducted in two commodity clusters in six regions, namely three regions for chillies (Jember Regency-East Java Province, Minahasa Regency-North Sulawesi Province, and Tanah Datar Regency-West Sumatera Province) and three regions for shallots (Majalengka Regency-West Java Province, Palangkaraya City-Central Kalimantan Province, and Simalungun Regency-North Sumatera Province). This study makes use of several analytical tools, namely: in-depth interviews with cluster stakeholders, the analytical hierarchy process (AHP), and SWOT analysis. Nationally, there was a production surplus of chillies relative to consumption. Nonetheless, it proved difficult to take advantage of the surplus at the national level in order to stabilize prices in the main centers of consumption because chillies are perishable by nature, while consumers prefer fresh chillies. Fluctuations in the prices of chillies are more determined by the distance between producers and consumers and also seasonal demand factors. The formation of national average prices of chillies was driven by the fundamentals of current production and consumption which are weekly or even daily in nature. For shallots, there was a surplus nationally, although prices still spiked at certain times. It was because the production of shallots was relatively uneven and only centered on Java and NTB. Nonetheless, the demand for shallots did not show large seasonal spikes in comparison to the demand for chillies.

Keywords: volatile foods; food prices (search for similar items in EconPapers)
JEL-codes: Q00 Q11 (search for similar items in EconPapers)
Pages: 77 pages
Date: 2015
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