Proceedings of World Business and Social Science Research Conference
25-25 October, 2013, Novotel Bangkok on Siam Square, Bangkok, Thailand, ISBN: 978-1-922069-33-7
A Model to Determine Household-Based Food Industry for
Poverty Alleviation in Indonesia: Case of NTT Province
Ratih Dyah Kusumastuti, Fanny Martdianty, Rifelly Dewi Astuti and
Nurmala
The Indonesian economy has grown significantly at the rate of 5.37 percent
during the period of 2000 to 2012. It is predicted that the gross domestic
product will grow at a steady rate of 5 to 6 percent in the period of 2013 to
2014. Even though the economy outlook of Indonesia is looking good, the
country is still facing problem to overcome poverty. Provinces in the
eastern part of Indonesia still have high percentage of residents living
below the poverty line. According to the Indonesian Statistics Bureau
(BPS), the East Nusa Tenggara province (NTT), in particular, has 20.41
percent of residents living below the poverty line in 2012. However, the
province is also one the producers of food commodities, such as maize,
fresh roots, banana, and seaweed. The province is also considered as a
part of the national food support corridor in the Masterplan for Acceleration
and Expansion of Indonesia's Economic Development. Compared to other
sectors, the food sector has contributed the most to poverty alleviation, and
therefore the program in the NTT province would be optimal if it involves
the food sector by encouraging the residents to engage in a householdbased food industry. The East Sumba and West Sumba regencies of the
NTT province have large numbers of residents living below the poverty line
and currently, household-based food industries have already existed
sporadically in both regencies. The objective of the research is to develop
a decision making model to determine the best suitable household food
industry to be developed optimally in the East Sumba and West Sumba
regencies to help poverty alleviation. The research employs a combination
of qualitative and quantitative methods. The decision making model is
developed using Analytical Hierarchy Process (AHP), which criteria are
identified and confirmed through literature review and in-depth interviews
(IDIs) with two experts. The weights of the criteria are determined by
conducting IDIs with ten representatives from the local government and
business community in both areas. The identified five criteria for the model
are namely resources, demand, supporting industries, strategy and
competition, and supports from government and other parties. The results
show that resources criterion has the highest weight for East Sumba
regency, while strategy and competition has the highest weight for West
Sumba regency.
Field of Research: Management
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Department of Management, Faculty of Economics and Business, Universitas Indonesia
Kampus UI, Depok 16424, Indonesia, Phone: +62-21-7272425, 7272646 Fax: +62-21-7270024
Email address: ratih.dyah@ui.ac.id, fanny.martdianty@ui.ac.id, rifelly.dewi@ui.ac.id,
noercha@yahoo.com
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