Usage of mobile phones to support management of agribusiness activities in Indonesia

Abstract

PurposeThe purpose of this study is to assess the impact of mobile phone usage on sales and profit as the indicator of business performance, to analyse the facilitating roles of mobile phones and factors affecting farmers' decision to use the mobile phone in agribusiness activities.Design/methodology/approachIntensive farming was selected in this study due to its higher profitability than other crops. Data were compiled from field surveys of 1,040 farmer households in vegetable production regions of Indonesia. This study employed structural equation modelling, identifying mediating variables and quantifying multiple endogenous variables' direct and indirect effects in simultaneous regression equations.FindingsThe results indicate that mobile phone usage enabled farmers to increase sales, obtain market information, acquire improved agronomic technology, access credit and contact customers. The device enhanced profit through mediations of high sales, reasonable prices and access to credit and market information. The personal attributes of farmers determined the adoption of mobile phones to support agribusiness activities.Research limitations/implicationsThis study paid attention to the use of mobile phones, which was considered an integral technology of information and communication. Other components, such as personal computers and other Internet-based devices, need further study.Practical implicationsAs the rate of mobile phone use was still low, farmers should be encouraged to utilise the device. Socialisation and specially designed training workshops on agribusiness information systems using mobile phones are of the best ways.Originality/value Using structural equation modelling enables to analyse of multi-dependent variables in one model. Farm-level data provide a real situation, and policy implications should address the right target. The subject of this investigation is a semi-subsistence farm household that lacked access to information and communication technology.