Value Chain Implementation in Rural-Scale Integrated Coconut Farming System in North Sulawesi Province, Indonesia

Abstract

The value of coconut production in North Sulawesi reaches almost 10% of Indonesia’s total coconut production, and more than 95% is managed by farmers. The main problem in coconut development is that the management of coconut cultivation is still traditional, and the quality of the products produced is still low, so that coconut commodities that are multipurpose relatively have no added value. The economic value of coconut is still very dependent on primary products, namely coconut seeds and copra. To increase farmers‘income, the solution that can be taken is to implement the value chain in integrated coconut farming by diversifying coconut products. This is a review chapter that aims to present the implementation of value chain analysis approach and formulate the strategic development of integrated coconut farming system on a rural scale in the North Sulawesi province. Implementation of the value chain by diversifying coconut commodities can provide added value. By managing an integrated coconut farm that produces 3–5 processed products, the economic value of coconut will increase by about 5–6 times. Several issues become obstacles in the development of the value chain, including the lack of farmer participation in the modern chain, weak market power and market access, weak contractual relationship strength, and weak agricultural sector development orientation in the provision of employment.