Revealing the Arcs of Integration in the Coffee Supply Chain
DOI:
https://doi.org/10.25186/.v20i.2398Abstract
The coffee industry plays a vital role in Indonesia’s rural economy, engaging millions of smallholder farmers and various downstream actors across the supply chain. However, the level of integration among these stakeholders remains uneven, influencing both efficiency and competitiveness. This study examines the integration levels within the coffee supply chain in Indonesia, utilizing the concept of Arcs of Integration. By analyzing the relationship between stakeholders within the supply chain, we identify five integration categories: inward-facing, periphery-facing, supplier-facing, customer-facing, and outward-facing. Data collected from 192 farmers and 40 downstream stakeholders from four provinces were analyzed using factor analysis, and discriminant analysis was employed to validate the classification of stakeholders based on their level of integration. The results indicate that the majority of stakeholders fall within the periphery-facing category, indicating moderate integration with suppliers and customers. This suggests that stakeholders in the
Indonesian coffee supply chain often engage in transactional relationships rather than strategic, long-term collaborations. The study highlights the need for deeper integration among all stakeholders to enhance the efficiency, innovation, and competitiveness of the coffee supply chain, by working more closely together through joint business groups, cooperatives, and partnerships between farmers and lead firms.
Key words: Arcs of integration; coffee; Indonesia; periphery-facing, supply chain integration.
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