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Using Best-Worst Scaling to Determine Market Channel Choice by Small Farmers in Indonesia

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  • Umberger, Wendy J.
  • Stringer, Randy
  • Mueller, Simone C.

Abstract

A household survey and a novel Best-Worst scaling method are used to examine the relative importance of various buyer characteristics to small potato farmers in Indonesia. A Latent Class Cluster Analysis is used explore whether producers’ utilities for marketing channels are heterogeneous. For the aggregate sample, the attributes related to the buyer providing immediate cash payment, a price premium and always following through on their commitment to buy their potatoes were the three most important attributes. The results of the Latent Class Cluster Analysis found four unique classes or segments of producers, each with distinct utilities for buyer characteristics and interesting differences socio-demographic characteristics. The largest segment (44%) was relatively similar to the aggregate, placing a high importance on cash payment, price and willingness to negotiate. Two segments, 24% and 16% of producers placed a relatively high importance on the buyer providing access to certified potato seed or finance for purchasing inputs, and another segment placed the highest importance on having a long-term relationship with their buyer. This has interesting implications for traders, particularly traders who are interested in securing a long-term relationship with potato producers – simply being able to provide cash at the time potatoes are delivered and/or a small premium may immediately increase the strength of the relationship.

Suggested Citation

  • Umberger, Wendy J. & Stringer, Randy & Mueller, Simone C., 2010. "Using Best-Worst Scaling to Determine Market Channel Choice by Small Farmers in Indonesia," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 90853, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea10:90853
    DOI: 10.22004/ag.econ.90853
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    References listed on IDEAS

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    1. Berdegue, Julio A. & Balsevich, Fernando & Flores, Luis & Reardon, Thomas, 2005. "Central American supermarkets' private standards of quality and safety in procurement of fresh fruits and vegetables," Food Policy, Elsevier, vol. 30(3), pages 254-269, June.
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    1. Shaosheng Jin & Rao Yuan & Yan Zhang & Xin Jin, 2019. "Chinese Consumers’ Preferences for Attributes of Fresh Milk: A Best–Worst Approach," IJERPH, MDPI, vol. 16(21), pages 1-16, November.
    2. Sackett, Hillary M. & Shupp, Robert & Tonsor, Glynn, 2013. "Consumer Perceptions of Sustainable Farming Practices: A Best-Worst Scenario," Agricultural and Resource Economics Review, Cambridge University Press, vol. 42(2), pages 275-290, August.
    3. Ochieng’, Brian J. & Hobbs, Jill E., 2016. "Incentives for cattle producers to adopt an E. Coli vaccine: An application of best–worst scaling," Food Policy, Elsevier, vol. 59(C), pages 78-87.
    4. Shaosheng Jin & Bashiru Mansaray & Xin Jin & Haoyang Li, 2020. "Farmers’ preferences for attributes of rice varieties in Sierra Leone," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 12(5), pages 1185-1197, October.
    5. Apind, Benard Owino, 2015. "Determinants Of Smallholder Farmers Market Participation; A Case Study Of Rice Marketing In Ahero Irrigation Scheme," Research Theses 265572, Collaborative Masters Program in Agricultural and Applied Economics.
    6. Supehatin & Umberger, Wendy J. & Yi, Dale & Stringer, Randy & Minot, Nicholas, 2015. "The Effect of Indonesian Farmer Preferences for Crop Attributes in the Adoption of Horticultural Crops: A Best-Worst Scaling Approach," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205453, Agricultural and Applied Economics Association.
    7. Suprehatin, By & Umberger, Wendy J. & Yi, Dale & Stringer, Randy & Minot, Nicholas, 2015. "Can Understanding Indonesian Farmers’ Preferences for Crop Attributes Encourage their Adoption of High Value Crops?," 2015 Conference, August 9-14, 2015, Milan, Italy 212057, International Association of Agricultural Economists.
    8. Saeideh Khosroshahi & Lin Crase & Bethany Cooper & Michael Burton, 2021. "Matching customers’ preferences for tariff reform with managers’ appetite for change: The case of volumetric‐only tariffs in Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 65(2), pages 449-471, April.

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