Agriculture Value Chain as an Alternative to Increase Better Income's Distribution: The Case of Indonesia

Specific material handling and treatment for specific agriculture products is required. Enhancing the productivity, competitiveness and efficiency of agriculture value chain is a priority for Indonesia to achieve competitiveness. This chapter discusses the overview of agriculture value chain in Indonesia and provides case studies related to supply chain risk management and logistics cost. Then, the author may propose recommendations to optimize the agricultural value chain. Each agriculture commodity probably has different type of tier, type of supply chain risks, issues and activities which leads to the different proportion of logistics and distribution cost in each tier. The results showed differences in strategy either speculation or postponement for inventory management to improve the value of horticulture along supply chain, while in aquaculture research also shows the same differences. Moreover, the value chain analysis helps to identify the value created by each stakeholder. In the value chain of catchment fish, ship owner plays the dominant role in the whole income distribution, while in the aquaculture, spreader get the highest profit margin. Trader gives the highest value added during transportation but earns the lowest profit. The value chain analysis of fresh vegetables shows the highest portion of traders in the whole inventory cost.