Abstract
CONTEXT
In order for farmers in developing countries to combat the effects of climate change, sustainable agricultural practices (SAP) have been promoted, but their adoption rate remains modest. Prior research examining psychological and socio-economic issues has identified farmers’ limited knowledge and capital contribute to this problem. However, supply chain systems that require farmers to follow formal and informal rules (governance arrangements) have received little attention in previous studies.
OBJECTIVE
From a system thinking standpoint, this article seeks to comprehend farmers decision regarding SAP adoption by examining the influence of governance arrangements on the socioeconomic and psychological aspects of farmers. This paper concentrates specifically on governance arrangements between farmers and midstream actors, to whom farmers sell their products directly.
METHOD
This study utilises a qualitative research methodology, specifically employing multiple case studies. A system thinking approach utilising a Causal Loop Diagram was applied to comprehend farmers decision regarding SAP adoption. The case studies cover supply chain systems that have different governance arrangements. The study focused on examining the rice supply chains in Indramayu District and the fresh vegetable supply chains in West Bandung District, located in West Java, Indonesia.
RESULTS AND CONCLUSION
This paper found that different governance arrangements exhibit distinct influences, which in turn have varying impacts on farmers’ decisions to adopt SAP. Governance arrangements that foster greater market integration and exert influence on the psychological (e.g., knowledge and information) and socio-economic (e.g., provision of production inputs and price assurance) aspects are regarded as the most effective approach to promoting the adoption of SAP by farmers. Furthermore, this paper revealed that midstream actors play a crucial role in promoting the adoption of SAP among farmers.
SIGNIFICANCE
This paper contributes to the body of knowledge on how governance arrangements within agricultural supply chains influence farmers decision regarding SAP adoption. Specifically, it investigates the influence of midstream actors in facilitating farmers’ adoption of SAP by addressing their psychological and socioeconomic requirements. The findings imply that government supports must be extended to midstream actors that have made efforts to persuade their farmers to implement SAP as a means of addressing climate change, as well as implementing midstream actors-to-farmer extension initiatives alongside the government’s existing farmer-to-farmer extension programmes.
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