Nama : Erriza Aditya Arnis

Nim : 053195989

Jurusan : Ilmu Administrasi Bisnis

Tugas 3 : Bahasa Inggris Niaga

Impact of Monopsony-Like Conditions in the Indonesian Agricultural Sector

The dominance of a few large buyers, such as supermarket chains, in the Indonesian
agricultural sector can have significant effects on small-scale farmers. One of the most notable
impacts is on pricing. When large buyers have substantial market power, they can dictate lower
prices for agricultural products, squeezing the profit margins of small-scale farmers. This can
lead to income instability for farmers, making it challenging for them to invest in their farms or
improve their livelihoods. For example, in Indonesia, large supermarket chains have been known
to impose low purchase prices on farmers for their produce, leading to financial strain and
limited resources for the farmers.

Furthermore, the influence of monopsony-like conditions on the agricultural sector can also
affect the overall sustainability of the industry. When small-scale farmers are consistently
offered low prices for their products, they may struggle to maintain their farms and invest in
sustainable agricultural practices. This can lead to environmental degradation and reduced
productivity in the long run. For instance, the pressure to meet the demands of large buyers at
low prices may drive farmers to use unsustainable farming methods, such as excessive
pesticide or fertilizer use, which can harm the environment and compromise the long-term
viability of the agricultural sector.

In conclusion, the monopsony-like conditions created by the dominance of large buyers in the
Indonesian agricultural sector can have detrimental effects on small-scale farmers, including
reduced income stability and potential harm to the sustainability of the industry. It is crucial for
policymakers and industry stakeholders to address these imbalances in buyer power to ensure
fair pricing, support the livelihoods of small-scale farmers, and promote sustainable agricultural
practices in Indonesia.