Development of System Dynamics Model to Increase Salt Fulfillment Ratio

Pricing strategy at the local salt industry institutional structure of East Java, Indonesia

“…One issue that arises and causes the low and unstable price of local salt is the large import quota allowed by the government (Muhandhis et al, 2019), which is utilized by certain agents so that there is a price game in the market. To minimize it, there is a need for a market regulation that regulates the percentage of salt used by the industry then limits the import quota of salt, which is increasingly narrowed, as well as farmers' protection in the form of determining the lower limit of local salt prices.…”

“…The need for high-quality salt continues to increase during the growth of the industry. Sodium Chloride (NaCI) is traditionally used as a food additive in food processing because it plays an important role in texture and storage (Muhandhis et al, 2019;Rochwulaningsih et al, 2019). Therefore, the function of salt cannot be replaced by another ingredient.…”

“…Agents involved in salt distribution determine the desired profit margin. The phenomenon of high-profit margins determined by distributors and other salt agents requires consumers to incur greater costs to buy salt, giving rise to negative consumer perceptions of the state in managing the performance of national salt fulfillment (Muhandhis et al, 2019;Sudaryana & Pramesti, 2018).…”

“…The result of this modification is claimed to increase the number of salt products and NaCI levels that meet or even exceed the Indonesian National Standard (SNI), which is above 94.75%. Muhandhis et al (2019) suggested a strategy to increase the salt supply chain by using land intensification scenarios with thread-filtering technology, geomembrane, and tunnel systems claimed to increase farmer profits in the shortest dry season. At the same time, Rochwulaningsih (2017) emphasizes developing an entrepreneurial mindset that can support group/cooperative businesses with coaching, advocacy, technological facilities, and business capital in salt production.…”

Analysis of Salt Production, Consumption and Import in Indonesia

“…Mt = f(E,Y) …………………………………… (2) Suppose the relative price of foreign goods (E) increases. In that case, the domestic population will shift spending on foreign goods into domestic goods, and if real domestic income increases, then part of that domestic income will be spent on buying foreign goods, which means that domestic imports will increase (Abdullah & Shalihati, 2020;Sulistyaningsih & Alighiri, 2018;Muhandhis et al,2019).…”