Institutional Reform for Equitable Value Distribution inThe Rice Industry of Aceh, Indonesia

This study examines the marketing efficiency and farmers’ income share within the rice grain ‎industry of Pidie Regency, Aceh, Indonesia, with a focus on the institutional and structural ‎determinants of value distribution. The research addresses the persistent imbalance in ‎Indonesia’s agricultural marketing system, where smallholder farmers—despite being primary ‎producers—receive disproportionately low returns compared to intermediaries. Employing a ‎mixed-methods approach, the study integrates quantitative analyses of marketing margins, ‎farmer’s share, and efficiency ratios with qualitative insights from in-depth interviews and field ‎observations involving 200 farmers and traders. The results reveal that the rice marketing chain ‎is dominated by collectors, who control transportation, financing, and price information, ‎resulting in asymmetric market power. In the farmer–collector stage, farmers’ share reached ‎‎94.3% with an efficiency ratio of 1.43%, while in the collector–mill stage it declined sharply to ‎‎44% with an efficiency ratio of 14%. These findings demonstrate that marketing inefficiency ‎stems less from technical constraints than from institutional weaknesses—particularly the ‎passive role of cooperatives, information asymmetry, and inadequate post-harvest infrastructure. ‎The study recommends transforming cooperatives into autonomous agribusiness entities, ‎promoting digital price transparency platforms, improving rural infrastructure, and fostering ‎youth agripreneurship as pathways toward equitable market reform. This research contributes to ‎the broader literature on institutional economics and supply chain governance by proposing a ‎paradigm shift from the “Green Revolution” to a “Market Revolution”—a development model ‎that aligns productivity with fairness and sustainability in Indonesia’s agricultural value chains.