Main Article Content
The operation of multinational companies on cocoa bean trade in Indonesia related to the liberalization policy on trade and investment in Indonesia permits for multinational companies to operate in Indonesia and liable to buy cocoa bean directly from farmers. The problem encountered is the domestic market liberalization gives rise to changes in market power and results ini the dominant position of multinational companies. This research aimed to (i) analyze the impact of the exercise of market power by cocoa multinational company, (ii) to analyze the possibility of deregulation of cocoa bean domestic trade, and (iii) to estimate the potential increase in added value of cocoa down-stream industry as a result of deregulation. Some steps of research conducted includes (i) desk research, (ii) field survey by interviewing samples of farmers, traders, exporters, processors, as well as other business participants, (iii) special interviews with key persons related to regulation as well as deregulation of domestic trade and down-stream industry development, and (iv) focussed group discussion involving related stakeholders of cocoa. The results showed that the impact of the exercise of market power by multinational companies refers to the decreasing market shares of national companies from 2007 to 2009. Based on the market power domination of multinational companies in one side and the lack of down-stream industry development in the other side, there is a possibility to deregulate the above policy by continuing the new regulation (export tax of cocoa beans, directing multinational exporters toward downstream industryby partnership with domestic-idle capacity processing industry and import tariff escalation for processed cocoa). By the new regulation, the opportunity to increase domestic added value becomes greater. This cocoa down-stream industry development will increase the potential domestic added value at least 10%.Key words : Liberalization, deregulation, cocoa beans, value added, down-stream industry.
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).