Examining forest economies: A case study of silk value chain analysis in Wajo District

Abstract

Value chain analysis is a strategic analytical tool for understanding activities that represent the value of a product (or service), meanwhile providing opportunities for identifying competitive advantage. In this value chain analysis, the research aims to 1) map the actors of silk commodity business ventures, 2) determine the activities of these business actors, and 3) calculate and analyze financial ratios. This study was conducted in the Wajo District as a site historically well known for silk production, and which is undergoing efforts at revival. The method used in this study is observation, interview, and modeling. Data analysis was conducted as a classical value chain analysis, emphasizing the calculations of financial ratios. The results show that the main actors and activities in commodities trading are farmers, local traders, weavers, and silk clothing stores. The largest marketing margin is approximately IDR. 300,000, which is found in silk clothing stores. On the other hand, the smallest marketing margins amounted to about IDR. 100,000, which were identified among local traders. Finally, the largest profit margins were identified among farmers valued at IDR. 196,000, while the smallest profit margins were among local traders amounting to IDR. 68,000. Overall, this case study highlights that forest enterprises, in this case of the silk industry in Wajo, can improve household incomes for forest farmers, while maintaining their overall bargaining position against the market.

Lens on Tropical Sericulture Development in Indonesia: Recent Status and Future Directions for Industry and Social Forestry

“…Sericulture plays an important role, especially in rural communities [ 109 , 132 ]. The sericulture industry involves minimal investments, a short cultivation period, high employment potential, and very profitable returns that are suitable for the economy of a rural agrarian community [ 133 , 134 ].…”

Operational and strategic change during temporary turbulence: evidence from the COVID-19 pandemic

“…But value chain analysis has since been applied widely to reveal industry-specific stages and drivers of value creation. Recent examples include studies of the beef value chain in northern Kenya (Ndiritu 2020 ), Malaysia’s seaweed industry (Nor et al 2020 ), geothermal energy in the European Union (Vonsee et al 2019 ), offshore wind power in Ireland (Kandrot et al 2020 ), silk in Indonesia (Pratama et al 2019 ), and pharmaceuticals in the U.S. (Enyinda and Szmerekovsky 2008 ). Most recently, Gereffi ( 2020 ) explored lessons learned from the global medical supplies value chain during COVID-19.…”

The politics, economies, and ecologies of Indonesia’s third generation of social forestry: An introduction to the special section

“…This approach also shows which actors benefit, when interventions are introduced as part of particular programming. The case study presented by Pratama et al (2019) on the silk industry of Wajo highlights the realities experienced among silk producers, noting that their benefit-sharing arrangements with middlemen remain equitable. However, such benefitsharing, although presented as a success story, is by no means automatic.…”

“…In this issue, Suhel et al have focused on economic valuation of a resource and its relationship to the broader economic development opportunities from eco-tourism. Most of the research related to economic issues, however, discusses the importance of value chains and the need for improved understanding about commodity benefit-sharing for farmers involved in SF (Pratama et al 2019;Nuddin et al 2019). Similarly, Salampessy et al (2017) explored the ways that farmers can lose access as part of the changing means of production.…”