A System Dynamics Simulation of Rice Agroindustry Development by Divestment Pattern for Increasing Rice Production and Farmer Income

Abstract

About 60 percent of world populations and most of Indonesian people, rice is a staple food that must be available throughout the year. Therefore the existence of a rice mills for rice production become vital. The rice mills need to be developed continually in order to support an increasing of domestic rice production. To increase rice production,  postharvest loss can be reduced by replacing the  old rice mills with the  modern ones. By divestment pattern, a group of farmers can own and operate a rice mill, so they get an additional income from the operation of the rice mill. The main objective of this research was to findout the best scenario for a rice agroindustry development through divestment of ownership to the group of farmers. A system dynamics simulation methodology was applied in this research, with a case study in Cianjur District as a one of main area rice producer in West Java. The result from system dynamics simulation showed  that the investment of 10 units of rice mill per year along 10 years by divestment pattern will developed 212 units of rice mill that enough to mill the  paddy produced by Cianjur District farmers groups.

Keywords: rice, rice agroindustry, divestment, system dynamics simulation