Vol - 18, Issue - 04
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Journal of the Austrian Society of Agricultural Economics (JASAE)
Journal ID : JASAE-19-04-2022-139
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Abstract : The export of raw commodities which have lower value has not been able to generate optimal profit for a country. As a major producer of various agricultural commodities, Indonesia is still experiencing the same issue, and with many advantages that can be gained from the export of processed products, various encouragements have emerged for downstream agricultural export products. This study aims to analyze the benefit comparison obtained between exporting processed products and their raw materials. Research is conducted using linkage analysis and multiplier analysis in the 2016 input-output table. The result shows that processed products tend to be able to spur production growth of the upstream sectors, while agricultural commodities could not. Meanwhile, only a few main raw commodities which able to drive downstream sector production. In general, increasing exports of processed agricultural products generate a greater impact on the creation of aggregate output and total labor income. However, this increase in exports of processed agricultural products needs to be supported by sufficient supply, product safety, and certification in order to gain high competitiveness and be accepted in the global market. Processed products namely processed tea, processed rubber, processed palm oil, processed coffee, processed coconut, as well as processed chocolate can be considered a priority for increasing Indonesian export due to the high output and income multiplier creation and the availability of materials.

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