Indonesian agribusiness is changing for the better, pursuing new supply chain models (such as hypermarkets), products, and business structures. Yet Indonesian agribusiness must become even more dynamic to keep pace with the rapid transformation of agribusiness globally. At issue is not merely the ability of Indonesian products to compete in export markets, but the ability of Indonesian agribusinesses to hold their own against foreign competition in the domestic market.

DAI’s approach focuses on improving productivity and quality, the keys to upgrading agribusiness value chains in Indonesia. High productivity and quality are essential in each link of the value chain, beginning with production: without high-quality primary food and fiber products at the start, no amount of downstream effort and expense will create a high-quality end product. To stimulate productivity throughout a value chain, the DAI team seeks out “demanding customers”—forward-looking retailers, suppliers, and other intermediaries willing to pay a premium for quality—and transmits price signals to every firm and farm in the value chain as an incentive to upgrade production and improve quality. AMARTA also intervenes to ensure that enterprises have the inputs, financing, technical know-how, information, and incentives they need to respond to market demand.

The eight value chains with which the DAI team works are models for other agribusinesses of how productivity and quality can be improved and what the benefits to an enterprise will be. DAI therefore is implementing an ambitious public outreach, awareness, and education program that uses university curricula, national and regional conferences, alliances of agribusiness enterprises, training, and media campaigns.