Policy design of cayenne pepper supply chain development

Ria Indriani, Rahim Darma, Yunus Musa, A Nixia Tenriawaru and Muhammad Arsyad

Abstract: Production and harvest area of cayenne pepper in Indonesia in 2015 were 869 938 tons and 134 869 ha, respectively. This let Indonesia to be ranked first as the country with the largest chili and green pepper harvest area in ASEAN with an average contribution of 96.22%. The price of cayenne fluctuated very sharply with a very large margin. The highest prices that occur at the farmer and retailer level were $ US 4.48/kg and $ US 7.24/kg respectively in March 2017, while the lowest price was $ US 1.03/kg at farmer level and $ US 2.07/kg at retail level in December 2017. Purpose of the study was reviewing supplier performance and designing cayenne supply chain development policies. The research method used data obtained from farmers, chili traders and related agencies. Data analysis utilized Process Hierarchy Analysis (AHP). The results of the study showed the price factor has the highest value because the price of cayenne in Gorontalo Province was very fluctuating following the market mechanism. The policy recommendation for developing the cayenne supply chain which has the highest value and the first priority was the policy of determining the government’s purchase price.

Keywords: chain; design; policy; price; supply

Date published: 2020-06-29