E-Commerce As An Alternative To Promote Inclusive And Integrated Global Value Chain

Study case: Bulog and Market Operation

The price of Sembako (Nine kind of basic need) has risen steadily from year to year. This problem is caused by the presence of cukong (Food Mafia in English) since long time ago. Their presence has led to the inefficiency of sembako distribution to the consumers, where they prolong this distribution from the village to the town, in order to generate profit. This has hampered the government’s effort in stabilizing the price. It makes those who are poor become vulnerable with this issue.

In order to solve this problem, I see that there are two main problems that need to be concerned.

First, there is information discrepancy between government, farmers and those mafias on distributing the food from the farmers to the consumers. These mafias have figured out the best way to prolong the distribution system from the village to town through their own cycle. This cycle is hardly to be tracked by the government and farmers, which cause these both parties, cannot access this cycle to efficiently distribute their products. 

This problem is compounded with the inefficiency of the government’s bureaucracy and corruption, which has made the government remain powerless in handling this issue. Not only that, this cycle has made the cukong become richer and the farmers become poorer, because they are unable to sell their product with a reasonable price, since their price are forced to be low by these mafias.

Second, the government keeps using a classic way to solve the problem through Operasi Pasar (Market Operation). This operation is being run by selling the cheap products of Sembako to the market, in order to stabilize the price, especially when the price rises significantly. However, this solution has never solved until to its root causes, 

since this market has been monopolized by cukong’s cycle –even the seller can play the price of rice, by saving it until it is the right time to generate profit. This fact has saddened us, when Bulog –as the representative of the government cannot handle the power than those cukongs. Still, the mafias keep richer and cunning; the farmers still remain poor and suppressed.

This problem remains unsolved, when the urbanization rate increases every year. According to Price Waterhouse Copper in 2014, the urbanization population rate in Indonesia increases 51.4%, which are the second highest after Malaysia with 73.4% rate in ASEAN.  This has drained the human resources from the village to the town, when human resources in the villages become scarce, and the city is overflowed by this movement. This has deepen the discrepancy between the city and town.  If this phenomenon continues, thus who will develop the village?

The answer of this question is the villagers. The root cause of this problem is laid on the inability of those villagers to survive in the village, since their life standard is depended by those cukong. This made the income from the villager’s remains low, when the price of goods and services rise every year. This is also the reason for them to move to the town.

What the government needs to do right now is creating another track for farmers to sell their products to the consumers. The answer to this problem is e-commerce.

According to Oxford dictionaries, e-commerce is commercial transactions conducted electronically on the internet. By using internet, it will reduce time and distance limit, which enables all party to save their time. Usually, e-commerce operates in all four of the major market segments: business to business, business to consumer, consumer to consumer and consumer to business. Almost any product or service can be offered via e-commerce, from books and music to financial services and plane tickets.  This has made producers and consumers easier to sell their products.