The Effect of Agricultural Supply Chain Digitalization on Food Commodity Marketing Efficiency in the Era of the Industrial Revolution 4.0
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Abstract
The rapid diffusion of digital technologies in agriculture—including precision farming platforms, blockchain-enabled traceability systems, e-commerce marketplaces, and IoT-based logistics—presents transformative opportunities for reforming the inefficient, multi-intermediary supply chains that have historically suppressed farmer incomes and inflated consumer prices across Indonesian food commodity markets. This study investigates the effect of agricultural supply chain digitalization on marketing efficiency for key food commodities in West Sulawesi Province, employing a sequential explanatory mixed-methods design. Quantitative data were collected from 312 farmers, 48 agricultural cooperatives, and 86 agribusiness intermediaries across five districts, analyzed using structural equation modeling and marketing efficiency ratio analysis. Qualitative data from 36 key informant interviews elaborated the mechanisms and barriers of digital adoption. Results demonstrate that supply chain digitalization significantly improves marketing efficiency (β = 0.541, p < 0.001), reduces marketing margins by an average of 18.7 percentage points, and increases farmer price-received-to-retail-price ratios from 0.38 to 0.57. IoT-based logistics coordination and digital marketplace platforms demonstrate the strongest individual effects on efficiency outcomes. Barriers including limited digital infrastructure, low digital literacy, and inadequate financial inclusion constrain adoption particularly among smallholder farmers in remote areas. The study contributes a context-specific model of agricultural supply chain digitalization for developing economy settings and recommends targeted policy interventions to accelerate equitable digital transformation in the Indonesian agricultural sector.
Keywords: agricultural supply chain; digitalization; marketing efficiency; Industry 4.0; food commodities; Indonesia; West Sulawesi; blockchain; precision agriculture
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