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Agribusiness Value Chain Finance at Pandan wangi Rice : Opportunities and Challenges
(A Case In Buni Kasih Village, Warung Kondang Sub District, Cianjut District) By: Tuti Karyani 1), Yudi Kamajaya2
Abstract
Some of the economic actors problem in rural areas, especially small and micro farmers enterprises (SMEs) are difficulty in capital and marketing. Both problems can be overcome through the value chain approach, because the value chain is a sequence of activities in which value-added products at each stage, by transforming inputs into outputs, from producers to end-user markets. This activity is carried out by a series of actors, which sets rules and relate to each other in different ways in pandan wangi rice value chain. Current issues in pandan wangi rice production centers are indications of farmers switching to rice IR 64 or Ciherang, This is because the price of pandanwangi rire at the farm level is low, and the farming takes a long time with a lot of capital. In fact, whereas as known is a leading commodity Pandanwangi specific location rice because taste better, with a fragrant aroma and can only be grown in several sub districts in Cianjur. Bunikasih Village, Warungkondang Sub District have a complete institutional in rice agribusiness Pandanwangi . The purpose of this paper is to know the management of the value chain Pandanwangi rice; to analyze the performance of the mechanism commodity value chain on Pandanwangi rice; and identify opportunities and challenges of financing through the pandan wangi rice value chain. The results showed that the condition of the value chain management Pandanwangi rice is not runing well. The value chain of Pandanwangi rice performance on the farm level, is the highest attribute is quality of product (97.91%) and the lowest attribute is access to capital (53.51%). For the value chain Pandanwangi rice performance on gapoktan level, the highest attribute is quality of products (100%), commitment to partnership (100%), and efforts to improve skills (100%), and the lowest attribute is access to capital (50%). Increasing the value added made on Gapoktan level ie the change of paddy into rice, perform sorting and packaging; then CV Quasindo was to certification of pandan wangi rice. Mr. Yeka as a buyer of rice by buying blending rice from gapoktan. From the results of studies on development opportunities in the value chain finance is financing through the pandan wangi contract farming between gapoktan with farmers, and trade credits between gapoktan, suppliers and supermarkets. In addition to the main stakeholders involved in the value chain Pandanwangi rice, there are also support institutions that provide technical guidance to farmers Pandanwangi such as LPPM- IPB and the Department Agriculture of Cianjur. The challenge of financing passes through the value chain is the willingness of financial institutions to extend credit with the assurance that the market was obviously and institutions as avalis rice buyers.
Keywords: value chain financing, access to capital, certification, pandan wangi rice.
1 Member of Perhepi Komda Bandung.
2 I. Preface
Cianjur is a center of rice production in West Java province, where Pandanwangi variety grows well in some districts. Pandanwangi rice has advantages in terms of its pandan aroma, delicious taste and fluffier rice texture, favored by the public, and its higher selling price than other rice varieties.
Even though Pandanwangi rice has a lot of advantages, they do not make farmers cultivating Pandanwangi rice gain a large profit. In recent years, the extent of Pandanwangi wetland rice varieties have decreased, due the time for cultivate Pandanwangi rice is longer than other varieties, which results in farmers switch to cultivate IR 64 or Ciherang. This condition is encouraged because the price of dry milled rice panicle Pandanwangi level rise despite of tough peasant rising demand and prices in the market continues to soar. This occurs because older age of the rice production costs are quite high, especially the caring cost that requires more working capital, while access to formal financial institutions is not good. This situation is also compounded by the emergence of Pandanwangi rice “oplosan” making false or bargaining position of farmers is low and the price becomes a disincentive for farmers.
Another factor that causes low income levels of farmers is the length of marketing channels that are not offset by the increase in value-added contribution. Therefore, the Department of Agriculture and LPPM IPB introduced a supply chain management which has an important role to guarantee an efficient marketing system. The advantage of supply chain management for farmers is the availability of saprotan, guaranteed prices and markets, which in turn can increase farmers' income. The benefits for the partner companies are ensuring an appropriate supply of production in terms of type, quantity, quality, and according to market destination, continunity (Saptana, 2006). In addition, there are opportunities for implicit sources of capital that can be accessed by farmer or market participants involved, because the application of supply chain management that accompanied with value added efforts provide assurance market.
One of the farmer institutions involved in this supply chain is Gapoktan Wangunjaya, located in the Village Bunikasih, Warungkondang, Cianjur. Gapoktan Wangunjaya is an organization developed by several groups of farmers. Therefore, it is interesting to study how the performance of Pandanwangi rice supply chain management, and the mechanism of its value chain and how the opportunities and challenges in developing funding sources through the Pandanwangi rice value chain.
II. Method of The research
3 III. Result and Discussion
3.1 Chain Management
Integrated chain management involving multiple parties require a collective agreement. Agreement is a commitment to working across the Pandanwangi rice supply chain members. Cooperation between members of the supply chain will ensure the selling price of Pandanwangi rice. Farmers and Gapoktan Bunikasih working without a written contractual agreement. Farmers from the Village of Bunikasih who receive counseling and assistance from Gapoktan, are not directly bind to sell their crops to gapoktan. Gapoktan then distribute farmers harvest to suppliers. The farmers can not sell their product to the supplier directly because of the limited amount of Pandanwangi rice inventory, agricultural equipment and machinery. However, because of gapoktan, the farmers can sell their product to gapoktan and then channeled to the supplier.
Marketing activities undertaken by gapoktan and suppliers is supported by some of stakeholders who are involved in providing technical guidance to Pandanwangi farmers like IPB and the Department of Agriculture LPPM Cianjur. Cooperation between the suppliers and gapoktan began in 2006. Through LPPM IPB, gapoktan has a partnership with CV Quasindo. Gapoktan who work together at the time is a combination gapoktan named Citra Sawargi. However, due to the regulations of local governments that every village should have one gapoktan, then in 2009 Gapoktan Wangunjaya was established. Cooperation activities with CV Quasindo has continued until now. Cooperative relationship between gapoktan with CV Quasindo requires gapoktan to provide 10 tons of 100% pure Pandanwangi rice (in 2007) and 1 ton (now) for each month.
Another important partnership which well managed is a joint partnership between the supplier (Mr Yeka) and Gapoktan Wangunjaya. Cooperation between Mr Yeka and gapoktan outlined in a written contract. This cooperation is not only in term of the Pandanwangi rice marketing, but also for other varieties of rice like Ciherang and IR 64. It requires Gapoktan Wangunjaya to supply 5 tons of rice each month, which consists of 4 tons of pure Ciherang rice and 1 ton of mix Pandanwangi rice (“oplosan”) with ratio 60% Pandanwangi rice + 20% Ciherang + 20% IR 64. This deal has applied from 2009 to now. The payment performed after 1 week of delivery. The price agreed are Rp.7.800/kg for pure Ciherang rice and Rp.10.200/kg for mixed (“oplosan”) Pandanwangi rice. Rice sent from Gapoktan Wangunjaya was packed in 5 kg package.
This year, Regional Office of Department of Agriculture Cianjur make an agreement about import substitution with the exporter. The contract contains the agreement that exporters have to buy 200 tons of rice each year locally. However, this is still under negotiation and has not been established.
1). Transaction systems
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at the Village Store in downtown Warungkondang Sejahtera. The location of the village with a shop Sejahtera Bunikasih fairly close. It takes only about 20 minutes by motorcycle or about 40 minutes by public transportation. Sejahtera store can be mentioned as largest and most comprehensive input store in the Warungkondang District.
Purchasing of Gapoktan inputs can be held by paid crop system. The paid crop system is intended for gapoktan members. Transaction system is a form of service for the gapoktan members to facilitate the purchase of inputs.A payment delay that can be done through depositing Pandanwangi yields at harvest. After harvesting, the farmers sell their harvest to the harvest of panicle dry gapoktan. Once known to be weighed and the total harvest. Gapoktan then pay the farmer and reduces the total loans to the gapoktan.
Pandanwangi rice payment system between the CV Quasindo and gapoktan is paid in cash. CV Quasindo pay in cash to gapoktan if they had received Pandanwangi rice in storage. Payment system between gapoktan with suppliers (Mr Yeka) performed by the system delay, which the supplier (Mr Yeka) just to pay off the Pandanwangi rice gapoktan after two weeks of delivery.
2). Selection of Partners
The objective of partner selection in the supply chain is to ensure the creation Pandanwangi interwoven mutually beneficial cooperation. Parties in the supply chain partners should meet the requirements specified by the other party. Selection of partners in Pandanwangi supply chain included selection of suppliers and reseller partners. Actually, every farmer in a village are members of the village gapoktan, so there is nothing specific in the selection of farmers asked by Gapoktan Wangunjaya. The important for farmers are that Pandanwangi cultivation is done according to the GAP activity provided by PPL or LPPM IPB and they sell their crops to Gapoktan Wangunjaya. For Pandanwangi farmers was nothing specific in the terms of the partnership, provided that they are valued Pandanwangi crops with high, providing information and providing machinery and agricultural equipment loans, then they can make partnership with everyone.
Party suppliers such as Mr. Yeka and CV Quasindo have criteria in choosing a partner, but not too tight. The main criterion is the ability to provide products in accordance with the order, on time supply, commitment to work together and have a good reputation as a producer of Pandanwangi rice. For the suppliers, the criteria is sufficient for suppliers to partner with gapoktan. Moreover, Pandanwangi rice only grow well in Warungkondang areas and not in other areas which results in competitive advantage of Gapoktan Wangunjaya.
3) Supply Chain Collaboration
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care for members of the supply chain that ultimately improve the marketing process.
a) Collaboration Scope
Collaboration between supply chain members of Pandanwangi rice remained at the level of coorperative collaboration. Collaborative relationships among supply chain members is still not intensive. This is based on the relationship of collaboration, such as the flow of information, long-term fostering, and the risk division has not well conducted yet among farmers, gapoktan and partner companies. Information exchange on the price or estimated production is voluntary, not binding, and based on business purposes. Although sharing the risk is still borne by each, there is no collective risk sharing.
b) The Trust Building Proces
The process of trust building is a process that aims to foster trust among supply chain members. Efforts to create a trust is very crucial for member of the collaborative partnership within supply chain framework. Trust that exists to promote the smooth supply chain relationships and harmony. The low trust among supply chain actors will inhibit the exchange of information, unwillingness to share the benefits, as well as risk mitigation efforts together. The process of building trust in the supply chain is divided into three levels, namely contractual trust, competence trust and goodwill trust. Contractual trust means the trust that arises between the actors of the supply chain is based upon an agreement or an agreement on a specific term. The competence trust is a trust between two parties based on confidence in the competence of its partners. Trust is usually awakened by a working party has really become familiar with its business partners. The highest level of trust is goodwill trust which is built up based on good faith among partnering parties. At that level, those who partnered together create positive thinking and competitiveness of the supply chain to moving forward together. Agreement that exists in the supply chain Pandanwangi be an indication that the process of trust building is at the level of contractual trust. The process of trust building through efforts in a transparent transfer of information between Pandanwangi farmers, gapoktan, Mr. Yeka and CV Quasindo. Contractual ties that run for three years with Mr. Yeka and 5 years with CV Quasindo until the year 2011 are expected to improve the quality of built trust.
3.2 Supply Chain Structure
Pandanwangi rice supply chain structure of Bunikasih Village can be seen in Figure 1.
1. Rice farmers Pandanwangi
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: : flow of information : flow of product
Figure 1. Supply chain structure in the Bunikasih Village
members Gapoktan Wangunjaya effort required to conduct farming activities according to GAP. By following the GAP, the cultivation process can be more efficient. In addition, the process of planting in the Village adopts Bunikasih average harvest. This is done because of the time difference in the process of paddy rice cultivation and small Pandanwangi. If rice Pandanwangi takes 160 days to harvest, while the small rice takes only 100 days. So do the average harvest system. So the farmers who grow rice Pandanwangi and small farmers who grow rice have the same harvest time. This was done with the aim of reducing pests that attack. Most farmers in the village Pandanwangi Bunikasih has a land area ranging from 1-2 ha. The average farmer in the village Pandanwangi Bunikasih produce 7 tonnes / ha. Most of their crop is sold and some are used to seed the next planting season or personal consumption.
2. Gapoktan Wangunjaya
In the supply chain of rice in the Pandanwangi Bunikasih village, Gapoktan Wangunjaya chairman has a very central role in the marketing or production of Pandanwangi rice. In the organizational structure, the chairman assisted by secretary and treasurer. However in reality, almost all of the activities carried out by the chairman.
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Pandanwangi have good quality and quantity. The central role of Gapoktan Wangunjaya can be seen from the post-harvest activities to look for suppliers to sell their Pandanwangi products. Gapoktan Wangunjaya activity in the supply chain such as Pandanwangi rice inputs give credit to farmers, to purchase crops from farmers dried panicles, doing milling, grading and sorting Pandanwangi rice, packaging, distribution and sale to suppliers or stores. Gapoktan make the buying process panicle dry unhusked rice harvest or the harvest of farmers. The price offered from gapoktan is 4,000 / kg for dried panicles Pandanwangi harvest, dry grain harvests 3.500/kg for Ciherang, and 3,200 / kg for IR64 dry rice.
Gapoktan Wangunjaya do the milling and packaging activities. For the price of milling, gapoktan set the price of 30,000 / quintal. For packaging process, depending on the supplier orders. For the price of 25 kg packaging, gapoktan set the price at 1.250 / pack, while for the packing of 5 kg gapoktan set a 1000 price / pack. For post-harvest process, attempts were made to produce quality rice 1, because the supplier wants only the head rice (quality 1).
Monthly obligation of gapoktan is sending orders to Pandanwangi rice suppliers or a partner company in accordance with the contract or order. For CV Quasindo, gapoktan deliver 1 million tons of pure Pandanwangi rice, while 5 tons of mixed (oplosan) rice and Ciherang rice sent to the supplier. CV Quasindo and gapoktan made a price agreement at 12 000 / kg, while for the price agreed upon with Mr. Yeka is 10.200/kg.
3. CV Quasindo
CV Quasindo interest to do Pandanwangi rice business was well received by the Department of Agriculture which at the same time (in 2006) is composing labeled rice certification program, especially the Pandanwangi varieties. Currently, CV Quasindo is the pioneer and the only producer with certified Pandanwangi rice purity guarantee designated by the Department of Agriculture.
The partnership between CV Quasindo and the Gapoktan agreed in April 2007 through the signing of a cooperation agreement between the CV Quasindo and Gapoktan Pandanwangi about buying and selling rice, with the following provisions:
1) Gapoktan must produce Pandanwangi rice through of Good Agricultural Practices (GAP) method as has been trained by the Institute for Research and Community Empowerment Bogor Agriculture University (IPB LPPM) as the executor agency designated by the Department of Agriculture for rice labeled certification program.
2) Pandanwangi is a rice variety that has the characteristics as stated in the Decree of the Minister of Agriculture No.163/Kpts/LB.240/3/2004 dated March 17, 2004 on the release of local rice strains Pandanwangi Cianjur as Pandanwangi named varieties;
8 4) Other sale requirement :
A. The purchase price of rice by CV Quasindo: Rp. 9.000/kg (in 2007), Rp.12.000/kg (now)
B. Packaging weight: 50 kg
C. Quality: Head Rice (maximum 5% broken grains)
D. Purchasing Location : In the CV Quasindo warehouse, Jl. RE Martadinata Commercial Complex Perrnata Ancol, Jakarta
E. Payment by CV Quasindo conducted periodically by the mechanism: 50% advance payment is made in 10 (ten) days prior to shipment and the balance at the time of rice have been accepted at the CV Quasindo warehouse location. Delivery of rice will be done every month at 10 tons (in 2007) and 1 ton (now). Delivery of 1 ton / month will be fully met no later than the tenth of each month.
F. Disputes in the implementation of this agreement will be handled in deliberation and consensus by both parties.
G. Special to decide disputes about the difference in quality of rice that does not comply with the agreed characteristics, the determination of the degree of violation will be determined
Partnership between Gapoktan and CV Quasindo currently limited to the aspects of market and management. To aspects of the capital, the company tried to lighten the load gapoktan partners by providing 50% down payment (10 days before shipping). It is quite helpful for gapoktan, because gapoktan has limited capital.
4. Suppliers (Mr Yeka)
In addition to working with CV Quasindo, gapoktan also working with individual businessman, Mr. Yeka. But Mr Yeka is not buying pure Pandanwangi rice, because the inventories can not meet Mr. Yeka’s need. Besides, the low market price at the supermarket and shops cause Gapoktan produce mix (oplosan) Pandanwangi. For example, in Personal Store Cianjur, Pandanwangi rice price in 5 kg package is Rp.56.000. It can be calculated as approximately Rp.11.200/kg. To compete with other Pandanwangi rices, the mixing is one way that can be taken. Although mixed (oplosan) rice, but its quality is still maintained. In which additional rice has a good characteristic and its amount does not exceed 50 percent. This is to maintain the image and the original flavor of the Pandanwangi rice.
9 5. Supporting institutions
Some of the institutions which support services in the supply chain from the Bunikasih Village pandawangi include IPB and the Regional Office of Department of Agriculture Cianjur.
3.3 Business Process Chain
1. Relationships Business Patterns Chain
Gapoktan and farmers are partners, but there is no written agreement about it. Farmers have a very important role as the backbone of gapoktan. Farmers sell their product to gapoktan, and gapoktan buy farmers crop. In addition gapoktan also provide counseling and assistance from the government channeled to farmers. Gapoktan relations and the company or supplier is formal, where there is a written agreement between the two. If there is one who violates it will be detrimental to either party.
2. The distribution pattern
Distribution patterns in the pandanwangi rice supply chain describe the three main components, namely the flow of product, cash flow, and flow of information. The process of delivering the three components are important to know in order to analyze whether the flow distribution in the supply chain is running smoothly or are still constrained.
1) The flow of products
10 2) Flow of Money
The flow of money moving from right to left in the distribution flow. Venture capital for maintenance activities such as purchasing seeds, fertilizers and wages using private capital and loans or assistance from the fund from which gapoktan PUAP. In addition to the money used as capital, there is also money from the sale of rice. The flow of money came from consumers who buy Pandanwangi rice to the supermarket, where supermarkets are supplied by CV Quasindo or Mr. Yeka. CV Quasindo and Mr. Yeka buy rice from gapoktan Pandanwangi.
3) The flow of information
Information flow within the supply chain consists of Pandanwangi rice market information, technical information culture, information on post-harvest handling. Market information includes the final target (the consumer), consumer behavior, such as what products that consumers want. The information is provided by the supplier or the company to gapoktan. Technical information about the cultivation is given by the Department of Agriculture through the PPL Village Cianjur LPPM Bunikasih and IPB. In addition to providing technical information in accordance with GAP cultivation, Cianjur District Agriculture Office also provides market information or training courses or seminars.
3. Brand identity
Brand identity of a product be considered important by consumers or producers. Brand of a product are different from other products. Branding by gapoktan serves to enhance the image of the gapoktan. Branding occurs at a rate depending on the agreement between the gapoktan and suppliers. Farmers who sell rice to gapoktan Pandanwangi are not give the brand. Cooperation between the gapoktan and CV Quasindo, branding the authority of the partner companies. Gapoktan sold in the form of 50 kg and sold by CV Quasindo in the form of 5 kg with Mie Xiang brand. Related to cooperation between gapoktan and the suppliers Mr.Yeka, branding authority is in gapoktan hand. Brand used by gapoktan Wangunjaya is “Ayam Pelung”
3.4 Supply Chain Performance
1). Supply Chain Performance in Farmer Level
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application of quality standards and culture (91.74%), quality of Pandanwangi rice products (97.81%) , the level of sales (88.79%), commitment to work together (85.31%), efforts to improve skills (96.88%), the disclosure of information (97.32%), rates of return (76.75%). Farmers consider these attributes have fulfilled their expectation and running properly.
Attributes which farmers have the appropriate level of compliance are thesse following criteria, namely access to capital (53.42%), collaborative research (68.35%), fair underwriting risk (62.5%), and the selling of Pandanwangi rice (68.25 %). Although these attributes are still in line with the expectations of farmers, but needs to be improved, especially at attributes of access to capital. Most of the Pandanwangi farmers using private capital for farming activity and there are some farmers who received assistance from gapoktan. They do not borrow capital from banks because banks loan system is complex and has many requirements. If they do not have the capital for activities (crop failure), usually they sell something of value from them and there is some borrowing from neighbors or relatives.
2) Performance-Level Partnership of Gapoktan
Partnership performance assessment carried out in the Gapoktan Wangunjaya to know how far the Gapoktan Wangunjaya partnership that exists between the perception of supply chain actors of Pandanwangi rice. Attributes which have high levels of compliance with gapoktan very appropriate criteria are the following attributes: the quality of Pandanwangi rice (100%), commitment to partnership (100%), and efforts to improve skills (100%). Gapoktan considers these attributes have fulfilled their expectation and went very well.
Attributes which gapoktan have appropriate level of compliance with the criteria are the following: transaction costs and marketing efficiencies (66.67%), the application of quality standards and cultivation (75%), sales (75%), collaborative research (66.67%) , the disclosure of information (75%), profitability (75%), underwriting risks in a fair (66.67%), and the selling of Pandanwangi rice (75%). The attributes that have high levels of compliance with the criteria are not suitable (26-50%) is access to capital (50%). Access to capital by gapoktan still bad. This is because the capital is used by gapoktan capital from government grants in the form of PUAP. Gapoktan only rely on these funds as capital. There is no savings of their members each month. In addition, gapoktan did not dare to borrow money to the bank. In addition to borrowing from banks has many requirements, they also fear of responsibility for the loan because the leader have to responsible for the loan. Therefore, production and marketing activities undertaken by gapoktan have not optimized because of limited capital.
3.5 Financing Opportunities Through Pandanwangi Rice Value Chain
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supply chain that have been built as well as assessment of partnership performance attributes in the perceived value chain gapoktan farmers which is still low and the access to capital. Therefore the first step that must be understood first is the notion of the value chain itself, the understanding of the entire business, increase understanding of the risks and costs, as well as knowing how to adapt to market situation. In addition to structuring the right financial product for the chain and stakeholders is fundamental.
Financial value chain can be defined as the flow of credit and other financial services to participants in the value chain and provided by an outside source. The flow of funds can be entered at any stage of the value chain, these flows can enter through input suppliers, processors, or can also go through financial triangulation, i.e. by the interaction between producers, buyers and banks.
According to Miller (2010) understanding of the concept of chain stakeholders and the financial arrangements in a way that strengthens the chain is essential for risk management: strategies for managing risk and cost. It should be emphasized that flows between value chain members is not limited to credit; equally important are other benefits that are derived from only a part of the chain. In terms of finance for small producers, for example, by being part of the chain they are safer, having less risk and can earn credits, while outside the chain, it may not be obtained. For example, in a partnership between farmers and gapoktan funded from PUAP, slowly but surely need to be strengthened from internal sources as a form of awareness of all members of the gapoktannya through the provision of the crop in the form of membership dues. Strengthening of internal capital, as still not enough to strengthen capital to finance farming gapoktan members, then the approval of the members could deliver with a loan application or commitment of capital from outside sources. It appears that the financial value chain of Pandanwangi rice yet understood the importance of capital accumulation itself from the group with the apparent reluctance to pay dues, and the credit application to the head rests gapoktan only. The possibility of this is due to members not yet received sufficient understanding for the lack of socialization.
13 Table 1. The Financial Instruments of Value Chain
Types of Product Financial Instruments a) Based Trade Credit products
Suppliers (input) Broker / wholesale
Leading corporate / contract farming
b) Based on Sales of Receivables
factoring Forfaiting c) Based on the physical assets of Letter of Credit
Repos agreement lease
d) Insurance risk reduction
futures contracts Futures hedging e) Improving the quality of the supply of credit securitization
In the implementation of the supply value chain of Pandanwangi rice, financial instrument is limited to agricultural contracts between farmers and gapoktan, with input suppliers traditionally occurred in the community but not in the value chain. Other instruments used are trade credits not from a financial institution but from Gapoktan to suppliers Mr Yeka. Mr Yeka use terms of sale provide for payment by asking for one-week grace period. Actually, it was hard for gapoktan because farmers want to be paid in cash, for the purposes of the next farm. Thus, here there are opportunities for financial institutions provide credit to farmers while waiting for the payment of gapoktan or from the supplier. Another instrument that has not been developed is insurance. Emerging insurance is insurance on the loan rather than on products or farming because financial institutions are still concerned about the outstanding loans that are guaranteed and can go back again. Surely this is a burden in the cost of credit. Therefore, it appears like a credit guarantee institution such as PT Jamkrindo.
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3.6 Challenges in Implementation of Funding Through the Value Chain
The implementation of financing through the value chain face several challenges, such as: • How to fund technical assistance and all non-financial support services; government subsidies may be needed to start up the chain until it is consolidated
• Need to formulate and implement public policies that are consistent and effective, and do not make policies that are counterproductive,
• Need to convince and attract financial institutions to adopt a vision and model of financing through the value chain, and make sure that the market can be created, so that financial institutions may be interested.
• Need to improve the judicial system and dispute resolution mechanisms in order to solve the problem in the chain.
• Need to measure and assess the impact of pilot programs. This is the only way to prove and convince people to try to engage in a series of value chains.
IV. Conclusion and Recomendation
4.1 Conclusion
Based on the results and discussion, conclusions obtained are as follows:
1. Conditions of supply chain management in the Bunikasih Village still not going well, especially at farmers and gapoktan level. The situation is causing many Pandanwangi level of rice production of farmers are not managed by gapoktan and marketed without gapoktan. This affects the supply of rice in Pandanwangi gapoktan that ultimately can not meet the demand of gapoktan partner companies.
2. Suitability of the attributes of a partnership at the level gapoktan and farmers indicated that there were problems in access to capital
3. Value chain that goes well will actually be able to invite capital sources both internally and externally. Passage of the value chain also produce a challenge, especially the financing for technical assistance, training for the early stages which can be from government subsidies.
4.2 Recommendation
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1. Need for improvement in the value chain execution systems, especially at farm level and gapoktan. Prices at the farm level should be increased so that farmers are willing to cultivate Pandanwangi rice.
2. Gapoktan need to be strengthened in order to provide capital to farmers while awaiting payment from the next chain actors, even sometime gapoktan can market directly to Pandanwangi rice consumers.
BIBLIOGRAPHY
Cianjur Statistics Office, 2010, Cianjur the numbers .. BPS. West Java.
Miller, C. & Jones, L. Of 2010. "Agricultural Value Chain Finance: Tools and Lessons," FAO, Rome, Italy and Practical Action Publishing, Rugby
Said et al 2006 .. Said AI. et. al., 2006. Productivity and Efficiency With Supply Chain Management. London: College of PPM
