Posts tagged: Indonesia

Aspirasi Bina Usaha mango cooperative

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By , July 8, 2012 9:58 am

The Context
Aspirasi Bina Usaha is a large farmer grouping with 46 members and diverse interests. Aspirasi received mangos not only from members (60 per cent) but also from outside farmers via collectors (40 per cent) and sold to both supermarkets (30 per cent) and traditional markets (70 per cent). To supply the supermarkets the organization works together with Bimandiri, a specialized supermarket supplier. Not all members have the same vision about the partnership and some only partially or opportunistically commit their deliveries resulting in breach of contract.

The Mechanism
Farmers or members of cooperatives who find that other members are free riding on their investments in supplying the higher-end supermarket retail channel, can separate themselves from the members and form a new group.

The Outcome
The institutional innovations undertaken were dynamic and entailed self-correction as well as resulting in improvements.

Some difficulties did occur in the group dynamic, such as mixed incentives and conflicts of interest. Farmer group members who were genuinely interested in the market channel innovation overcame the free‐ ride problem by separating themselves and creating a new farmer group named KUBM, to exclusively supply Bimandiri. KUBM and Aspirasi remained connected because of the benefit of that they could only jointly capture of government subsidies, and extension.