The Upshot of Upgrading: Seaweed Farming and Value Chain Development in Indonesia.

Abstract

Indonesia is the leading global exporter of seaweed, a raw material used to manufacture a higher value product commonly used in processed foods. The Indonesian government aims to capture that potential added value by developing the seaweed manufacturing sector through liberalization measures, exemplifying a recent trend in global development policy to “upgrade” value chains. Proponents say this approach brings economic benefits to all stakeholders, from small-scale farmers to large manufacturers, yet research has shown that these outcomes are not always realized. This study enters this debate by examining the complex social, political, and economic factors that generate constraints and opportunities for rural seaweed farmers in Lombok, West Nusa Tenggara province as they try to improve their position in the value chain. These findings bear implications for the fate of Indonesia’s development program, and suggest that addressing such institutional factors can support more equitable outcomes across value chains.