In 2016, the global amount of electronic waste (e-waste) reached 44.

7 million tons and it was estimated to increase

to 52.2 million tons by 2021. In Indonesia, the amount of e-waste in 2016 was 1.274 million tons or approximately
4.9 kg per capita and is predicted to increase every year. As a country that ranked 9th in the production of e-waste,
the e-waste management in Indonesia is categorized as an Informal Initiative—the lowest category on the
country’s e-waste assessment report. Improper management of e-waste could have adverse effects on
environment and health due to the hazardous contents of e-waste. On the other hand, proper management of e-
waste could bring benefits to the nation and its business entities. In 2016, the global amount of e-waste had an
economic value of more than $55 billion or approximately Rp 825 trillion. However, it is estimated that only 15-
20% of e-waste is recycled. Based on the current problem and potential, this study aims: (1) to design a RevME
application and a VRP algorithm to facilitate the collection of e-waste; (2) to design the implementation of RevME
application in gathering data of electronic products; (3) to design the business model of a reverse supply chain
system for e-waste, (4) to examine the potential economic value that can be obtained from the business. This study
is expected to facilitate better management of e-waste in order to generate high economic value and mitigate
harmful effects on the environment and health.

In this study, two methodologies have been carried out, namely the information search process and VRP model
development. The information search process was based on a literature review of journals and articles related to e-
waste, VRP algorithm, and mobile application development. Besides that, interviews were conducted with the
community and experts to obtain information on the problem and possible alternatives for e-waste management.
In VRP model development, the algorithm was developed using the Capacitated Vehicle Routing Problem with
Time-Window (CVRPTW) with a customer selection modification. The algorithm is used to process the data
received from the RevME application.

Several conclusions can be derived from this study which includes: (1) RevME application works by identifying the
data of consumers’ electronic waste. RevME is capable of receiving the data of weight, type, volume, specification,
and the expected pickup time of e-waste. RevME also has several features to provide information on consumers’
electronic products. RevME has been integrated with VRP algorithm using CVRPTW with customer selection
modification to provide the most cost-effective mechanism of e-waste collection; (2) to enhance the
implementation of RevME application, data of consumers’ electronic products can be gathered during the
transaction process between seller and buyer. The data can be used for various purposes even beyond the e-waste
collection such as providing information on the product’s reliability, demand density at a location, life cycle of the
electronic product, and market behavior; (3) the business model of reverse supply chain system for e-waste
upholds the value of sustainability, flexibility, and economic value of e-waste. This business obtains revenues from
e-waste sales, electronic products information sales, and cooperation with business entities; (4) the potential
economic value of e-waste that can be obtained within the system is Rp 1.84 trillion per year. This value is the value
of four types of e-waste, i.e. TV, cellphone, desktop PC, and laptop. The projected economic value of all types of e-
waste in Indonesia reaches Rp 18 trillion per year.

The reverse supply chain system for e-waste with RevME application and VRP algorithm answers five pillars of the
Sustainable Development Goals (SDGs) which includes Clean Water and Sanitation (Goal 6), Industry, Innovation,
and Infrastructure (Goal 9), Sustainable Cities and Communities (Goal 11), Responsible Consumption and
Production (Goal 12), and Life on Land (Goal 15). Therefore, the implementation of RevME & VRP algorithm
developed in this study will contribute to the attainment of several SDGs.
The population of Indonesia is predicted to increase from 258,162,000 people in 2015 to 321,551,000 people by 2050
(UN DESA, 2018). The annual population growth requires the country to fulfill the resulting increased needs,
especially for food. The data from FAO et al. (2018) stated that 20.7 million Indonesians experienced starvation
between 2015-2017, which led to serious threats of food sovereignty. Sustainable Development Goals 2030 gives the
mandate that everyone should have adequate access to food needs (Goal 2) through sustainable agricultural
production and resilience to climate change (Goal 13 and 15). Climate change is one of the factors that can affect the
stability of food production. Extreme weather and increasing global temperature have a negative implication on
agricultural productivity, especially on staple foods such as rice, wheat, and corn.

Food sovereignty is dependent on the availability of productive agricultural land. Research by BAPPENAS (2010)
projects that agricultural land will decrease significantly in Java-Bali by 182,556 ha, Sulawesi (78,701 ha), Kalimantan
(25,372 ha), Sumatera (3,170 ha), and Lombok (2,123 ha) by 2050 due to land conversion for other uses. Degradation
of agricultural land and climate change impact will affect food production capacity. Meanwhile, there are more than
35.75 million hectares of ex-concession forest areas, which without proper management will lead to environmental
sustainability menace (APHI, 2016).

To overcome the problems of food sovereignty and degradation of agricultural land, agroforestry is an alternative
land-use option where forestry, agriculture, fishery, and livestock activities are combined. However, agroforestry
systems that are currently implemented in Indonesia still face various problems with regards to their supply chains,
such as uncertainty on land ownership, lack of business efficiency, expensive logistics costs, low productivity, and
centralized institutions. Referring to these issues, the development of a new paradigm for Indonesia’s agroforestry
based on blockchain technology is essential to improve the effectiveness and efficiency of agroforestry system. The
implementation of blockchain technology will offer transparency, accountability, and data security to facilitate the
process of agroforestry development.

Agroforestcape (Agroforestry Landscape) is a program based on blockchain technology to promote agroforestry in

Indonesia as a solution to achieve food sovereignty and environmental sustainability targets. Agroforestcape can be
implemented by using the plant composition of sengon buto, teak, lamtoro, mangrove, pepper, rice, sago, and
cassava through three planting models of agroforestry systems, namely 2D (Two-Dimensional), 3D (Three-
Dimensional), and 4D (Four-Dimensional). An agroforestry model of 1 million ha is predicted to be able to increase
food production by 10 million tons per year compared to a traditional farming system without agroforestry and able
to provide foods for 50 million people. In addition, agroforestry contributes to the reduction of greenhouse gas
emissions (GHG) from terrestrial ecosystem where the conversion from agricultural land to agroforestry can absorb
carbon three times higher for the next 20 years.

Blockchain technology for Agroforestcape program is developed to make agroforestry supply chain management
more efficient and effective. Blockchain enables various stakeholders to directly exchange agroforestry data among
themselves without any assistance from a third party. Farmer groups will receive real-time transactions data about
their product logistics through the platform. Middleman will get live notifications from the loop regarding new
contracts and increase customer engagement processes. Logistics will be able to record the supply chain tasks
automatically, supervise trip mapping, and distance tracking to monitor goods distribution without using GPS
(Global Positioning System).
All kinds of agroforestry activities will be digitally managed through the blockchain system and the farmer groups
will easily monitor their business processes without being directly involved in the field. Apart from that, blockchain
can also guarantee transparency and accountability of forestry institutions because any change of data that one
actor wants to make in the system must be approved by all parties involved to guarantee the data security and
prevent them from being misused. The implementation of Agroforestcape can be integrated with government
programs, such as One Map Policy, Social Forestry, and Smart Village by involving community members actively in
the formulation of development plan and the detailed proposal of financial budget. The development of
Agroforestcape based on blockchain technology is expected to encourage the growth of agroforestry system in
Indonesia towards food sovereignty and environmental sustainability targets in the future.

DESPRO: A STRATEGY TO DEVELOP RURAL INDUSTRIAL CLUSTERS THROUGH E-COMMERCE MARKETING IN

INDONESIA
By I Gede Sthitaprajna Virananda - UI

Summary
The rural area plays a predominantly significant role in the economy of developing countries, including Indonesia.
However, modernization of the economy has increasingly left behind the rural economy, causing issues related to
the Sustainable Development Goals (SDGs). These issues include rural poverty (goal 1), underemployment and rural-
urban migration (goal 8), and underdevelopment of industry and infrastructure (goal 9). To revitalize the rural
economy, the government has attempted programs such as village funds and One Village One Product (OVOP),
albeit with challenges and limitations. Allocation of village funds cannot always rely on infrastructure spending, while
OVOP has been too dependent on the government for marketing. Meanwhile, e-commerce is growing rapidly in
Indonesia, though the phenomenon is mostly urban. Despite this, the rise of Taobao Villages in China proves that e-
commerce could be compatible with the rural economy, bringing many economic benefits such as employment
creation and poverty alleviation. This case signifies an opportunity for Indonesia to leverage its vibrant e-
commerce sector to empower rural economies.

The author proposes a solution called Desa Produksi Online (Despro), which entails developing rural industrial
clusters and connecting them with e-commerce marketplaces. This program will leverage existing government
programs such as village funds and OVOP. While analyzing the problem and elaborating this solution, this paper
answers the following problems: how the government could develop the rural economy through Despro, how e-
commerce marketing could be implemented in Despro, and what the benefits of this program for stakeholders are.
This paper uses literature review with secondary data as the methodology. Data and research results help the author
analyze the problem, while case studies, particularly of Taobao Villages in China, provide benchmarks to develop the
recommendation.

To build the rural economy, the government should harness local potentials to develop the industrial sector as it
could mitigate diminishing returns to labour in the agriculture sector. However, producers in Indonesia’s rural
industries are hindered by several issues, including those related to marketing and financing. These issues include
limited market scope, limited information on market price and trend, and limited access to business loans. By
connecting rural producers with e-commerce, Despro could help address these issues. First, using e-commerce allows
rural producers to easily access markets beyond the local area. Second, e-commerce marketplaces expose rural
producers to various market information. Third, rural producers selling on e-commerce marketplaces leave track
records that could be used for credit assessment for when they apply for a loan.

The implementation of the Despro program will have to involve multiple stakeholders such as e-commerce
companies, logistics and internet services providers, and village cooperatives. In the initial phase, the government
will have to identify potential villages where rural industrial clusters could be developed, with the help of the OVOP
database. Partnership will then be conducted with e-commerce companies, which will provide facilitation and
promotion services for the rural producers selling on their platform. To facilitate e-commerce activities by rural
producers, the author proposes the Agen Despro system, which leverages a network of agents recruited by
partnering e-commerce companies from the local community to not only help buyers but also rural sellers.
Meanwhile, the government will have to develop rural internet and logistics infrastructure to support e-commerce
activities. Village cooperatives could also be involved to provide supporting functions, such as e-commerce
marketing services and bulk-buying for rural industrial clusters. In some villages where the construction of basic
infrastructure has been sufficient, village funds could be channeled to finance various parts of the Despro program.
There are various benefits to gain from the Despro program for the stakeholders involved. Rural producers will be
facilitated to sell on e-commerce, giving them wider market access, more market information, and easier access to
loans. Despro will also incentivize the development of rural industrial clusters, which create external economies of
scale and reduce transaction costs for the rural producers in them. For e-commerce partners as well as logistics and
internet companies, Despro will help them tap into rural markets for expansion. In conclusion, Despro will
boost employment, alleviate poverty, and strengthen the country’s industrial base by connecting potential villages
with e-commerce.