Effects of Small-scale Tapioca Processing Unit Development on Employment and Income Generation in Lampung, Indonesia

Masdjidin Siregar
Monograph ICASEPS • 2006 Indonesia


It is largely believed that low and fluctuated farm gate prices of cassava in Lampung stemmed from the oligopsonistic power of the existing large-scale tapioca- processing companies. To overcome the problem of low and fluctuated prices of cassava, employment, and to improve rural economy, the Provincial Government of Lampung initiated the development of Farmer's Tapioca Processing Units or ITTARA (abbreviated from Industri Tepung Tapioka Rakyat). Depending on the sources of investment, the ITTARA tapioca processing units is divided into three categories: (a) personally financed, (b) financed by private-companies, and (c) financed by local government. A unit of ITTARA is an autonomous business unit of a farmers' cooperative or a farmers' group. Presently, almost all ITTARA units financed by local government and several ITTARA units financed by private companies collapsed due to managerial incompetence and inadequate monitoring and control from the responsible local government institutions and from related private companies. By contrast, the majority of personally financed ITTARA units are still operating, although they are still depending upon large cassava enterprises, particularly in the drying process of tapioca during wet seasons for the ITTARA units are not equipped with oven or other drying facilities.





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