Abstract:
Sago plant produces sago starch, which can be processed into various food and non-food uses and
has high demand in the domestic and international market. However, sago starch marketing is still
facing problems that make the crop has not yet optimally support the economy of sago growing and
processing households and communities. The study aimed to assess the market structure of sago
starch in Konawe District of Southeast Sulawesi Province, Indonesia. Data collection was done in two
sago growing subdistricts. Respondents consisted of 55 sago producers, four subdistrict collectors,
and two large traders. Data were collected using questionnaires, observation, and in-depth
interviews, and were analyzed using Concentration Ratio and descriptive statistics. Study results
showed that market participants consisted of producers, collectors, large traders, and retailer. The
producer or seller concentration was low, and the atomistic selling condition prevailed in the sago
extraction industry. The market share of the four largest collectors was 67.25%. Product
differentiation was not present or low among the sago producers. Observed barriers to entry into
the sago starch production included lack of technical skills, availability of water sources, knowledge
of the area, and the nature of sago extraction operation. Barriers to entry into sago marketing were
moderate and included capital requirement, economies of scale, knowledge of the area, and
networking with both producers and large traders. The sago starch market has deviated from the
norms of competitive market structure, namely, an oligopsonistic market structure. The structural
features of the industry need to be improved by establishing standard and grades to facilitate
marketing and to lead to product differentiation.
Keywords: marketing, market structure, producer, sago, starch, Indonesia
