Model to Incubate Rural Agribusiness in Central Java: Lessons from an Action Research

Abstrak

This paper aims to develop a model to incubate a rural agroindustry.  It elaborates the steps in the participatory development of group entrepreneurship utilizing local resource, identifies the enabling and inhibiting factors and the challenges ahead. This is a collaborative action research between Jenderal Soedirman University (Unsoed), Politeknik Banjarnegara, and the local government of Banjarnegara district. The research team consists of multidisciplinary personnels (economics, management, and food technology). The project began with intensive coordination between Unsoed and The Planning, Research and Development Board of Banjarnegara district. The board identified taro as a local natural resource that has not been processed for commercial purposes despite its huge potential to be developed as a promising food processing industry. Unsoed and the board agreed to develop entrepreneurship by utilizing this local resource. The board has led the collaboration among the local government agencies involved in this project. Group was chosen as a strategy to develop entrepreneurship. Members were recruited from farmer groups, women farmer groups and rural youth. They have been provided with motivational support, trainings on taro processing, production tools and machines, packaging and labeling, promotion and business networking and other business assistance necessary to develop the new venture. Data were collected through documents, participatory observations, informal interviews and group discussions with members of the new venture group and the relevant government agencies. Online discussions were also conducted to intensify communication between stakeholders. Through reflective evaluation based on the collected data, the authors and stakeholders discussed the corrective steps to succeed the new venture. Data collection and decision making about the progress of business (product, pricing, promotion, sales, human resource, and profit) went on a regular basis. Based on this process, lessons learned were concluded. The results show that the strong support from the district government, good coordination among government agencies and other stakeholders, provision of entrepreneurial motivation, training, and mentoring have lifted up the  branding of taro from low-value to higher-value commodity, and provide employment and income to rural people. The identified enabling factors are trust, support and coordination among stakeholders, and innovation. Building trust between organizations instead of individuals could be challenging in the future. Another challenge is the capacity building of the group-based venture to facilitate continuous improvement.