The competitiveness analysis of shallot in Indonesia: A Policy Analysis Matrix

Abstract

Shallot is a national strategic commodity in Indonesia, but it is development has a fundamental technical, socioeconomic, and policy support problems. Therefore, it is essential to know the competitiveness of shallot in Indonesia and the incentive policy to implement the comparative advantage to become a sustainable competitive advantage. The purposes of this study are to (1) analyze the profitability of shallot farming privately and socially, (2) analyze the competitiveness of shallot farming from a competitive and comparative advantage perspective, (3) review the impact of government policy on shallot farming, and (4) formulate incentive policies in the development of shallot commodities. The empirical results of the Policy Analysis Matrix revealed that shallot farming in production centers in Indonesia has both competitive and comparative advantages. The highest competitive and comparative advantages were found in the dry season in the upland of Malang district with the coefficient values of PCR (Private Cost Ratio) of 0.268–0.508 and DRCR (Domestic Resource Cost Ratio) of 0.208–0.323. The lowest competitive advantage was found in the lowland of East Lombok district in the dry season with a coefficient value of PCR 0.728–0.844. The lowest comparative advantage in the dry season was found in East Lombok district with a DRCR of 0.448, while in the rainy season, it was found in Wonosobo district with a DRCR of 0.522. These results mean that it is more profitable for Indonesia to increase domestic shallot production than to import. Improving shallot competitiveness can be carried out by implementing advanced technology, agricultural infrastructure, capacity building of farmers’ resources, and government incentive policies to increase productivity and competitiveness sustainability.

Analysis of competitive and comparative advantages of potato production in Indonesia

“…Private prices can be defined as the level of market prices received by producers in selling the output produced and/or the level of prices paid by producers in procuring the necessary production inputs. While social prices are prices formed in economic conditions where the market mechanism is perfectly competitive or the economy is in a state of general equilibrium (full employment) [ 72 , 74 ]. Empirically, it is difficult for the equilibrium cost to be equal to the market prices and, thus, it can be approached using an opportunity cost such that social prices need to be adjusted to government policies and market distortions.…”

The effect of cultivation habits on the growth and yield of several shallot varieties

“…Fusarium wilt attacks will increase during the rainy season because of the air humidity. Unlike the dry season, shallot producers obtained a greater selling price during the wet season [17]. Under such conditions, growing local varieties, especially Topo-2, will be more profitable for farmers due to the intensity of maintenance to control Fusarium wilt and shallot caterpillars Spodoptera exigua Hub., can be minimized.…”

Phenological growth stage of tropical shallot (Allium cepa L. Aggregatum group) planted from seed in lowland area based on the BBCH scale

“…Shallot ( Allium cepa L. Aggregatum group, 2 n = 2 x = 16) is the most crucial Aggregatum subgroup that is widely and commercially cultivated in tropical lowlands of Indonesia (Jones & Mann, 1963; Permadi, 1994; Saptana et al, 2021). Shallot is a spice with a distinctive aroma and pungency, which also has medicinal properties and nutraceutical qualities (Ariyanti et al, 2018; Lu et al, 2011; Mikaili et al, 2013; Sun et al, 2019).…”

“…Shallot is more popular and important than common onion in Southeast Asian countries (Tashiro et al, 1982). In Southeast Asian countries, such as Indonesia, shallot is an unsubstituted cooking spice, supply fluctuation of which may affect inflation and deflation (Bodamaev et al, 2020; Saptana et al, 2021). In these countries, shallot is always available in traditional and modern markets throughout the year in all seasons.…”