A Review on the Development Strategies of Agro-industrial Institutions in Indonesia


  • Rahmat Fadhil Department of Agricultural Engineering, Syiah Kuala University
  • M. Syamsul Maarif
  • Tajuddin Bantacut
  • Aji Hermawan


Strategy, Development, Institutions, Agro-industry, Indonesia


The importance of agro-industrial development is deeply associated to necessity for development of agriculture-based economic activities. An alternative model and an institutional model selected should consider the innovation taken, feasibility, the lowest cost, the lowest possible consequences or risks. This article was aimed to describe strategies for development of agro-industrial institutions and some other opportunities for novelty as a research contribution. Results of the analysis discovered some research opportunities that become challenges for researchers, in particular in the context of wide open agro-industries. They include ones related to the historical analysis, the comparative analysis and the functional analysis, the assessment of institutional positions, the structurization of institutional systems, future prospects, the assessment of potential innovations and the institutional performance measurement. In-depth review of one component or in depth-study of a combination of components is continuously required.  Therefore, characteristics of each agricultural commodity, social dynamics, current development and technological advances, policy changes and global challenges become challenges crucial for development of agro-industrial institutions in the future.

Author Biography

Rahmat Fadhil, Department of Agricultural Engineering, Syiah Kuala University

Department of Agricultural Engineering, Syiah Kuala University


J.E. Austin, Agroindustrial Project Analysis; Critical Design Factors, EDI Series in Economic Development, Baltimore-Maryland: The Johns Hopkins University Press, 1992.

Sukardi, “Formulasi Definisi Agroindustri dengan Pendekatan Backward Tracking (Formulation of the Agro-industrial Definition with a Backward Tracking Approach)â€, Pangan, vol. 20, no. 3, pp. 269-281, 2011. (in Indonesian)

T. Bantacut, Sutrisno, D.F.A. Rawi, Pengembangan Ekonomi Berbasis Usaha Kecil dan Menengah. Dalam Kemitraan Pengembangan Ekonomi Lokal ( Economic Development Based on Small and Medium Businesses in the Local Economic Development Partnership), Yayasan Mitra Pembangunan Desa–Kota dan Business Innovation Center of Indonesia, Jakarta, 2001. (in Indonesian)

H. Siregar, “Perspektif Model Agro-Based Cluster Menuju Peningkatan Daya Saing Industri (The Perspective of Agro-Based Cluster Models towards an Industrial Competitiveness Improvement)â€, AGRIMEDIA, vol. 11, no.2, pp. 1-20, 2006. (in Indonesian)

C. Djamhari, “Orientasi Pengembangan Agroindustri Skala Kecil dan Menengah; Rangkuman Pemikiran (The orientation of Small and Medium Scale Agro-industrial Development; Summary of Thought)â€, Infokop, vol. 25, pp. 121-132, 2004. (in Indonesian).

V. Gaspersz, Manajemen Produktivitas Total (Total Productivity Management), Jakarta: Gramedia, 2000. (in Indonesia).

L. Arsyad, Ekonomi Pembangunan (Economic development), Yogyakarta: STIE YKPN. 1999. (in Indonesian)

M. Nasution, Pengembangan Kelembagaan Koperasi Pedesaan Untuk Agroindustri (Institutional Development of Rural Cooperatives for Agro-industries), Bogor: IPB Press, 2002. (in Indonesian).

C. M. Silitonga, Analisis keunggulan bersaing kopi Arabika Gayo organik di Indonesia (The analysis of competitiveness Excellence of Gayo Organic Arabic Coffee in Indonesia), Thesis, Medan: Universitas Terbuka, 2008. (in Indonesian).

M. S. Maarif, “Revitalisasi Kelembagaan Agribisnis (Agribusiness Institutional Revitalization)â€. AGRIMEDIA, vol. 4, no. 3, pp. 30-33, 2000. (in Indonesian).

A. Indriati, Strategi Peningkatan Kualitas Sumber Daya Manusia Untuk Meningkatkan Kinerja Usaha Kecil dan Menengah (Strategies for Improving Qualities of Human Resources to Enhance the Performance of Small and Medium Businesses), Thesis, Sekolah Pascasarjana Intitut Pertanian Bogor, 2015. (in Indonesian).

J. E. Brown, Agroindustrial Investment and Operations, Washington: World Bank Publications, 1994.

F. J. Gouillart, J. N. Kelly, Transforming the organization, New York : McGraw-Hill, 1995.

D. Anderson, L. A. Anderson, Beyond Change Management: How to Achieve Breakthrough Results Through Conscious Change Leadership, Second Edition, San Francisco: Pfeiffer, an Imprint of Wiley. 2010.

J. Greenberg, R. A. Baron, Behavior in Organizations, 9th Edition, New Jersey: Prentice Hall International, Inc., 2007.

S. P. Robbins, Organization Theory: Structure, Design and Application, 3rd edition, New Jersey: Prentice Hall International Inc., 2009.

Z. F. Ikatrinasari, M. S. Maarif, E. G. Sa’id, T. Bantacut, A. Munandar, “Model Pemilihan Kelembagaan Agropolitan Berbasis Agroindustri dengan Analytical Network Process (A Model of Agro-politan Institutional Selection Based on Agro-industries with the Analytical Network Process)â€, Jurnal Teknologi Industri Pertanian, vol. 19, no. 3, pp. 130-137, 2011. (in Indonesian).

J. W. Walker, Human Resources Strategy, New York: McGraw-Hill Inc., 1992.

B. V. Arkadie, “The Role of Institutions in Developmentâ€. Proceedings of World Bank Annual Conference on Development Economics, pp. 153-157, 1990.

J. Gibson, J. Ivancevich, R. Konopaske, Organizations: Behavior, Structure, Processes, 14th Edition, New York: McGraw-Hill Education, 2011.

Syahyuti, Bedah Konsep Kelembagaan: Strategi Pengembangan dan Penerapannya dalam Penelitian Pertanian (The Concept Review of Institutions: Strategies for Development and Implementation in Agricultural Research). Pusat Penelitian & Pengembangan Sosial Ekonomi Pertanian, Badan Litbang Pertanian, Bogor, 2003. (in Indonesian).

R. W. Scott, Institutions and Organizations: Ideas an Interest, Third Edition, Los Angeles: Sage Publication, 2008.

N. Uphoff, Local Institutional Development: An Analytical Sourcebook with Cases, Kumarian Press, Cornell University, 1986.

C. Lobo, Institutional and Organisational Analysis for Pro–Poor Change: Meeting IFADâ€s Millennium Challenge, the International Fund for Agricultural Development (IFAD), 2009.

V. W. Ruttan, Hayami, Agricultural Development; an International Perspective, Baltimore: John Hopkins Press, 1984.

P. B. Horton, C. L. Hunt, Sociology, New York: McGraw-Hill Book Company, 1984.

J. Fowler, Prioritizing Institutional Developmet: A New Role for NGO, Centre for Study and Development. Sustainable Agriculture Programme Gasekeeper Series SA35, London: IIED, 1992.

D. C. North, Institutions, Institutional Change and Economic Performance (ebook), Cambridge University Press, Ebook Editors: Randall Calvert and Thrainn Eggertsson, 2014.

D. E. Hebding, L. Glick, Introduction to Sociology. McGraw-Hill Inc., 1995.

S. Soekanto Sosiologi: Suatu Pengantar (Sociology: An Introduction), Edisi Baru Cet. 28. Jakarta: PT. Raja Grafinco Persada, 1999. (in Indonesian).

S. M. P. Tjondronegoro, Revolusi Hijau dan Perubahan Sosial di Pedesaan Jawa (The Green Revolution and the Social Alteration in Javanese Countryside), Dalam buku “Keping-Keping Sosiologi dari Pedesaanâ€, Jakarta: Direktorat Jenderal Pendidikan Tinggi, Departemen Pendidikan dan Kebudayaan RI, 1999. (in Indonesian).

A. E. Yustika. Ekonomi Kelembagaan: Definisi, Teori, dan Strategi (Institutional Economics: Definitions, Theories and Strategies), Malang: Penerbit Bayu Media, 2008. (in Indonesian).

T. Purwaka, Dasar-Dasar Pemahaman Peningkatan dan Pengembangan Kapasitas Kelembagaan (Basic Understanding of Improvement and Development in the Institutional Capacity), Jakarta: PT Gramedia Pustaka Utama, 2006. (in Indonesian).

G. D. Mitchell, A New Dictionary of the Social Sciences. Aldine Transaction: 2nd editions New Jerse, 2006.

R. Bunch, G. Lopez, Soil recuperation in Central America: Measuring impact 4 to 40 years after intervention. IIED New Horizons Conference, Bangalore, India, 1994.

M. M. Cernea, “Culture and organization: The social sustainability of induced developmentâ€, Sustainable Development, vol. 1, no. 2, pp. 18-29, 1993.

R. de los Reyes R., S. G. Jopillo, An Evaluation of the Philippines Participatory Communal Irrigation Program. Quezon City: Institute of Philippine Culture, 1986.

C. P. Kottak, When people don’t come first: Some sociological lessons from completed projects. p. 36. In M. Cernea (Ed.). Putting People First: Sociological variables in rural development. Oxford Univ. Press, Oxford. 1991.

N. Uphoff, Learning from Gal Oya: Possibilities for participatory development and Post-Newtonian social science, Ithaca: Cornell Univ. Press, 1992.

T. Djogo. Kelembagaan dan Kebijaksanaan dalam Pengembangan Agroforestri (The Institution and Judiciousness in Agro-forestry Development), World Agroforestry Centre (ICRAF), 2003. (in Indonesian).

O. E. Williamson, Economic Institutions of Capitalism: Firms, Markets, Relational Contracting, Macmillan New York: The Free Press, 1985.

Koentjaraningrat, Kebudayaan, Mentalitas dan Pembangunan (Culture, Mentality and Development). Jakarta: PT Gramedia Pustaka Utama, 1997. (in Indonesian).

J. L. Gillin, J. P. Gillin JP, Cultural Sociology: A Revision of An Introduction to Sociology. New York: The MacMillan Book Company, 1956.

K. Appendini, M. Nuijten, V. Rawal, Rural Household Income Strategies and Interactions with the Local Insititutional Environment: A Methodological Framework. Rural Institutions and Participation Service (SDAR). FAO, Rural Development Division, Rome, 2003.

D. Paarlberg, “The Case for Institutional Economicsâ€, American Journal of Agricultural Economics, vol. 75, no. 3, pp. 823-827, 1993.

C. E. Togbe, E. T. Zannou, S. D. Vadouhe, R. Haagsm, G. Gbehounou, D. K. Kossou, A. van Huis, “Technical and institutional constraints of a cotton pest management strategy in Beninâ€, NJAS-Wageningen Journal of Life Sciences, vol. 60-63: 67-78, 2012.

D. Zuraida, J. Rizal, Masyarakat dan Manusia dalam Pembangunan: Pokok-Pokok Pemikiran Selo Soemardjan (Society and People in the Development: Selo Soemardjan’s Basic Thought). Jakarta: Pustaka Sinar Harapan, 1993. (in Indonesian).

A. Agustian, F. Supena, Syahyuti, E. Ariningsih, Studi Baseline Program PHT Perkebunan Rakyat Lada di Bangka Belitung dan Lampung (The Baseline Study of People’s Pepper Plantation PHT Program in Bangka Belitung and Lampung), Laporan Penelitian. Pusat Penelitian dan Pengembangan Sosial Ekonomi Pertanian. Bogor, 2003. (in Indonesian).

Purwanto, M. Syukur, P. Santoso, Penguatan Kelembagaan Kelompok Tani Dalam Mendukung Pembangunan Pertanian Di Jawa Timur (The Farmers’ Group Strengthening in Favor of Agricultural Development in East Java). Balai Pengkajian Teknologi Pertanian, Malang, Jawa Timur, 2007. (in Indonesian).

J. Nehnevajsa, 1993, Sosiologi Modernisasi (Sociology of Modernization), Yogyakarta: Tiara Wacana, 1993. (in Indonesia).

L. S. Budi, Rancang bangun model strategi pengembangan agroindustri wijen (Sesamum indicum L.) (The design of sesame (Sesamum indicum L.) agro-industrial development strategies), Disertasi, Sekolah Pascasarjana Institut Pertanian Bogor, 2009. (in Indonesian).

A. Giddens, New Rules of Sociological Method (2nd ed.), Cambridge, UK: Polity Press, 1993.

A. Giddens, Central Problems in Social Theory, Basingstoke, UK: Macmillan, 1979.

A. Giddens, A Contemporary Critique of Historical Materialism, Stanford University Press, 1994.

A. Giddens, The Constitution of Society, Cambridge, UK: Polity Press, 1984.

Z. A. Achmad, Mencabar Teori Stukrturasi: Dualisme atau Dualitas (Challenging the Structurization Theory: Dualism or Duality?). Program Doktor Ilmu Sosial, FISIP Universitas Airlangga, 2015. (in Indonesian).

S. Loyal, The Sociology of Anthony Giddens, London Sterling Virginia: Pluto Press, 2003.

P. Saunders, Space, urbanism and the created environment, in Social theory of modern societies: Anthony Giddens and his critics, D. Held, and J.B,Thompson (Eds.), Cambridge: Cambridge University Press, 1989.

I. Craib, Anthony Giddens, London: Routledge, 1992.

J. B. Thompson, The theory of structuration, in Social theory of modern societies: Anthony Giddens and his critics, D. Held, and J.B,Thompson (Eds.), Cambridge: Cambridge University Press, 1989.

J. Nizet. La socilogie d’Anthony Giddens. Paris: La découverte, 2007. (in France)

J. J. P. Saxena, Sushil, P. Vrat, “Hierarchy and Classification of Program Plan Elements using Interpretive Structural Modellingâ€, System Practice, vol. 5, no. 6, pp. 652-670, 1992.

Eriyatno, Ilmu Sistem, meningkatkan mutu dan efektifitas manajemen (The System Science, enhancing qualities and effectiveness of management), Surabaya: Penerbit Guna Widya, 2012. (in Indonesian).

Marimin, Teknik dan Aplikasi Pengambilan Keputusan Kriteria Majemuk (Techniques and Application of the Compound Criteria Decision-Making), Jakarta: PT. Gramedia Widiasarana Indonesia (Grasindo), 2008. (in Indonesian).

S. Kanungo, V. V. Bhatnagar, “Beyond generic models for information system quality: the use of interpretive structural modeling (ISM)â€, Systems Research and Behavioral Science, vol. 19, no. 6, pp. 531-549, 2002.

H. D. Sharma, G. Sushil, A.D. Gupta, “A structural approach to analysis of cause of system waste in the Indian economyâ€, System Reserach and Behavioral Science, vol. 11, no. 2, pp. 17-41, 1994.

L. S. Bud, M. S. Maa’rif, I. Sailah, S. Raharja, “Strategi Pemilihan Model Kelembagaan dan Kelayakan Finansial Agroindustri Wijen (Strategies for Selection of Sesame Agro-industrial Financial Appropriateness and Model)â€, Jurnal Teknologi Industri Pertanian, vol. 19, no. 2, pp. 56-63, 2009. (in Indonesian).

R. Jaya, Machfud, M. Ismail, “Aplikasi Teknik ISM dan ME-MCDM Untuk Identifikasi Posisi Pemangku Kepentingan dan Alternatif Kegiatan Untuk Perbaikan Mutu Kopi Gayo (An Application of ISM and ME-MCDM Techniques to Identify the Position of Stakeholders and Alternative Activities for the Improvement of Gayo Coffee Qualities)â€, Jurnal Teknologi Industri Pertanian, vol. 21, no. 1, pp. 1-8, 2013. (in Indonesian).

N. Panackal, A. Singh, “Using Interpretive Structural Modeling to Determine the Relation between Youth and Sustainable Rural Developmentâ€, Journal of Management and Research, vol. 4, no. 1, pp. 58-74, 2015.

A. P. Pandi, Rajendra, P. V. Sethupathi, D. Jeyathilagar, “The IEQMS model for augmenting quality in engineering institutions–an interpretive structural modelling approachâ€, Total Quality Management & Business Excellence, vol. 27, pp. 3-14, 2016.

K. Murtadlo, D. Utomo, “Interpretative Structural Modeling Institutional Land Use of Agricultural in Pasuruanâ€, Journal of Economics and Sustainable Development, vol. 5, no. 12, pp. 113-122, 2014.

J. Forstater, “Phenomenological and Interpretive-Structural Approaches to Economics and Sociology: Schutzian Themes in Adolph Lowe’s Political Economicsâ€, The Review of Austrian Economics, vol. 14, no. 2/3, pp. 209–218, 2001.

D. W. L. Hsu, Y. C. Shen, B. J. C. Yuan, C. Y. Chou, “Toward successful commercialization of university technology: Performance drivers of university technology transfer in Taiwanâ€, Technological Forecasting & Social Change, vol. 92, pp. 25–39, 2015.

M. Godet. “The Art of Scenarios and Strategic Planning: Tools and Pitfallsâ€, Technological Forecasting and Social Change, vol. 65, no. 1, pp. 3–22, 2000.

R. Bourgeois, F. Jesus, Participatory Prospective Analysis; Exploring and Anticipating Challenges with Stakeholders, CAPSA Monograph No 46, United Nations, 2004.

M. Godet, R. Monti, F. Meunier, F. Roubelat, Scenarios and Strategies: A Toolbox for Scenario Planning. Lipsor Working Papers, 3th issue, Laboratory for Investigation in Prospective and Strategy (LIPSOR), 2004. Available on line: http://en.laprospective.fr/dyn/anglais/articles/bo-lips-en.pdf

Eriyatno, F. Sofyar, Riset Kebijakan, Metode Penelitian untuk Pascasarjana (Policy Research, a Research Method for Graduate Degree), Bogor (ID): IPB Press, 2007. (in Indonesian).

M. Godet, “Future Memoriesâ€, Technological Forecasting & Social Change, vol. 77, no. 9, pp. 1457-1463, 2010.

W. N. Dunn, Public Policy Analysis, 5th Edition, New York: Rotledge, Taylor & Francis Group, 2016.

A. T. Mosher, Getting Agricultural Movin,. New York: Free Press, 1966.

Alkadri, Tiga Pilar Pengembangan Wilayah (Three Pillars of Regional Development), Jakarta: BPPT, 1999. (in Indonesian).

E. Rogers, Diffusion of Innovation, New York: Free Press, 2003.

D. Sabadka, “Innovation Potential Metricsâ€, Annals-International Journal of Engineering, vol. 10, no. 3, pp. 449-455, 2012.

M. Å paÄek, M. Å tÄ›pán, Designing New Business Model as A Breakthrough Innovation for Competitive Advantage Creation, In: Proceedings International Days of Statistics and Economics (MSED), 2013.

MERIT (Maastricht Economic and social Research and training centre on Innovation and Technology), European Innovation Scoreboard 2008 – Comparative Analysis of Innovation Performance, Maastricht: MERIT, 2008. Also available at: http://www.proinno-europe.eu/metrics.

K. Goffin, R. Mitchell, Innovation Management: Strategy and Implementation Using the Pentathlon Framework. New York: Palgrave Macmillan, 2005.

J. Baumgartner, The Way of the Innovation Master. Belgium: JPB, Bwiti bvba. Erps-Kwerps, 2010.

V. B. Khanapuri, P. Soni, S. Sharma, “Assessing Value Innovation potential of Indian Organizationâ€. International Conference on Technology and Business Management. March 28-30, pp. 1301-1312, 2011.

D. V. Parshukov, D. V. Khodos, N.I. Pyzhikova, K. E. Ivanovna, V. E. Yuryevna, “Tools for Assessment of Innovation Potential of the Business Environment Development in the Regionâ€, Biosciences Biotechnology Research Asia, vol. 12, no. 3, pp. 2983-2994, 2015.

S. Zemtsov, “Assessment of Innovation Potential for Russian Regionsâ€, ERSA conference papers, ERSA’s Annual Conference 2014, Central London, 1 December 2014. Available at SSRN: http://ssrn.com/abstract=2594351.

J.C. Chang, â€Strengthening Value Innovation Potential - A Study of Innovation- Oriented Industry in Taiwanâ€, International Journal of Advancements in Computing Technology (IJACT), vol. 5, no. 4, pp. 882-889, 2013.

S. Ezell, T. Ogilvie, J. Rae, Seizing the White Space: Innovative Service Concepts in the United States, Technology Review 205/2007, Tekes, the Finnish Funding Agency for Technology and Innovation, Helsinki, Finland, 2007.

G. De Prat, D. Nepelski, G. Piroli, Innovation Radar: Identifying Innovations and Innovators with High Potential in ICT FP7, CIP & H2020 Projects, JRC Scientific and Policy Reports – EUR 27314 EN, Seville: JRC-IPTS, 2015.

J. Vacek, E. Vacík, J. Skalický, Y. Šlechtová. Map of the Company Innovation Potential, Department of Management, Innovations and Projects, Faculty of Economics, University of West Bohemia, Czech Republic, 2001.

C. Scarlat, C. Alexe, E. I. Scarlat, “Assessing the Firm’s Innovation Potential: A Romanian Case Studyâ€, Management and Production Engineering Review, vol. 2, no. 4, pp. 57-65, 2011.

H. Aguinis, Performance Management, New Jersey: Pearson Prentice Hall, 2007.

R. Noe, J. Hollenbeck, B. Gerhart, P. Wright, Human Resource Management: Gaining a Competitive Advantage, New York: MgGraw-Hill, 2010.

M. Hannay, “Performance Appraisal: Who Know Best?†Journal of Human Resources Education, vol. 5, no. 4, pp. 15-25, 2010.

M. S. Maarif, “Revitalisasi Kelembagaan Agribisnis (Agribusiness Institutional Revitalization)â€, AGRIMEDIA, vol 4, no. 3, pp. 30-33, 2000. (in Indonesian).

W. Petterson, Gijsbers, R. Schrank. Goal Oriented Performance Evaluation (GOPE): A Model-Based Approach. Performance Measurement - Theory and Practice, Centre for Business Performance. University of Cambridge, pp. 727-734, 1998.

G. Dessler, Human Resources Management, 9th Edition, New Jersey: Prentice Hall Inc., 2003.

S.C. Debnath, B. B. Lee, S. Tandon, "Fifty Years and Going Strong: What Makes Behaviorally Anchored Rating Scales So Perennial as an Appraisal Method?", International Journal of Business and Social Science, vol. 6, no. 2, pp. 16–25, 2015.

I. Rothmann, C. Cooper. Organizational Psychology and Work Psychology: Topics in Applied Psychology, London: Hodder Education, 2008.

L. L. Byars, L. W. Rue, Human resource management, 10th eds, New York.: McGraw-Hill Higher Education, 2011.

S. E. Jackson, R. S. Schuler, S. Werner, Managing Human Resources, 11th Edition. South-Western College Pub., 2012.

R. S. Kaplan RS, D. P. Norton, Translating Strategy into Action: The Balanced Scorecard, Harvard Business School Press, 1996.

B. E. Becker, H. Ulrich, The HR Scorecard: Linking People, Strategy and Performance, Boston: Harvard Business School Press, 2001.

P. Suwignyo, U. S. Baticti, A. S. Carrie, “Quantitative Models for Performance Measurement Systemâ€, International Journal of Production Economics, vol. 64, no. 4, pp. 231-241, 2000.

S. Ingle, “Performance Measurement Questionnaire: An Application to the Irish Automotive Component Industryâ€, Performance Measurement. Theory and Practice. Papers from the First International Conference for Business performance. University of Cambridge, pp. 507-514, 1998.

D. Li, C. O’Brie, An Empirical Study for Performance Measurement of Supply Chain Partners Performance Measurement- Theory and Practice, Centre for Business Performance, University of Cambridge, pp. 615-622, 1988.

U. Haris, Rekayasa Model Aliansi Strategis Sistem Agroindustri Crumb Rubber (Engineering of Strategic Alliance Model for Crumb Rubber Agroindustrial System), Disertasi. Bogor: Program Pascasarjana, Institut Pertanian Bogor, 2006. (in Indonesian).




How to Cite

Fadhil, R., Maarif, M. S., Bantacut, T., & Hermawan, A. (2017). A Review on the Development Strategies of Agro-industrial Institutions in Indonesia. Asian Journal of Applied Sciences, 5(4). Retrieved from https://ajouronline.com/index.php/AJAS/article/view/4877