Rural modernisation through intensive vegetable farming agribusiness in Indonesia
Joko Mariyono, Hamidah Abdurrachman, Enny Suswati, Agnes Dwita Susilawati, Makmur Sujarwo, Jaka Waskito, Suwandi Suwandi, Arif Zainudin
Abstract
Traditional farming that changes to profitable agribusiness can serve a machine for rural modernisation. This article assesses factors that determined the decision of smallholder vegetable producers to participate in vegetable-based agribusiness and analyses the impact of agribusiness participation and other determinants on the economic returns. Structural equation modelling was employed to show a proposed model of cumulative causation theory. Data were compiled from a quantitative survey of 357 selected farm households located in major vegetable-producing areas of Bali and Java, Indonesia. Results show that human capital and household endowment motivated farmers to participate in vegetable-based agribusiness. Women's participation significantly contributed to agribusiness participation and agribusiness participation led to income generation. Opportunities exist to expand vegetable-based agribusiness and increase farmers’ income by providing adequate access to transportation infrastructure, an advantageous agribusiness environment, and investing in human capital through training and extension services.