ASSIGNMENT 3 ENGLISH COMMERCE

NAME : CICI HERAWATI NIM : 048129771

MANAGEMEN

QUESTION

Analyze the effects of monopsony-like conditions in the Indonesian agricultural sector,

particularly focusing on the relationship between large supermarket chains and small-scale
farmers. In your essay, discuss how the dominance of a few large buyers can influence the
pricing of agricultural products, the income stability of farmers, and the overall sustainability
of the agricultural sector. Use specific examples to illustrate your points.
ANSWER

Monopsony-like conditions in the Indonesian agricultural sector, particularly the relationship

between large supermarket chains and small-scale farmers, have significant effects on the
pricing of agricultural products, the income stability of farmers, and the overall sustainability
of the agricultural sector.
These large buyers can negotiate lower prices from suppliers, including small-scale farmers,
to offer competitive prices to consumers.For example, if a large supermarket chain demands
lower prices from small-scale farmers to list their products on the platform, those farmers
may have to accept lower profits or cut corners on quality to meet the demands.
Furthermore, the dominance of large buyers can lead to a lack of transparency and
accountability in the market, making it difficult for small-scale farmers to access fair prices
and market opportunities.For example, if large supermarket chains prioritize larger suppliers
over smaller ones, smaller farmers may struggle to access markets and maintain their
livelihoods.
In conclusion, monopsony-like conditions in the Indonesian agricultural sector, particularly
the relationship between large supermarket chains and small-scale farmers, have significant
effects on the pricing of agricultural products, the income stability of farmers, and the overall
sustainability of the agricultural sector.
These effects can be mitigated by implementing fair trade practices and promoting
competition in the market to ensure that small-scale farmers can access fair prices and market
opportunities.

Citations:
http://irep.iium.edu.my/88335/1/88335_Monopsony,%20powerful%20buyers%20and
%20small%20sellers.pdf
https://www.researchgate.net/publication/
324032797_Effects_of_supermarket_monopsony_pricing_on_agriculture
https://www.solidaridadnetwork.org/wp-content/uploads/2023/03/Solidaridad_-Price-in-
global-commodity-value-chains_FINAL.pdf
http://irep.iium.edu.my/88335/1/88335_Monopsony%2C%20powerful%20buyers%20and
%20small%20sellers.pdf