The Contribution of Off-Takers on Sustainable Agricultural Cluster Businesses

1. Introduction

In many countries, especially the developing country, the agriculture sector is quite important. Millions of people rely on agriculture as their primary source of income, and it significantly boosts the GDP of the country in addition to being essential for preserving social stability and guaranteeing food security. Over seventy percent of people live in rural areas in many developing countries, and many of them depend either directly or indirectly on agriculture for their livelihood. Furthermore, agriculture is the backbone of rural economies, providing locals with a source of income and employment prospects [1,2].

However, despite the importance of the agricultural sector, farmers often face various challenges that hinder their productivity and welfare. Farmers often struggle to gain access to adequate sources of capital to purchase agricultural inputs such as quality seeds, fertilizers, pesticides, and modern equipment. This capital limitation results in low productivity and crop quality. Prices of agricultural products often fluctuate drastically due to changes in weather, market demand and government policies. This price uncertainty causes farmers' income to be unstable, which in turn affects their economic welfare [3]. Farmers face difficulties in accessing wider and more profitable markets. They are often trapped in long and complex value chains, which reduce their share of profits. Without direct access to markets, farmers often have to sell their products at low prices to middlemen.

Advanced agricultural technologies and modern agronomic practices are often unavailable or unaffordable to farmers. Without adequate technological support, farmland productivity and crop quality tend to be low. Unsustainable agricultural practices can result in land degradation, decreased soil fertility and loss of biodiversity [4]. Without adequate attention to sustainability aspects, long-term agriculture may be jeopardized.

In the context of these challenges, the role of the offtaker becomes very important. An offtaker is an entity that commits to buying agricultural produce from farmers at a predetermined price. Offtakers can be agribusiness companies, cooperatives, financial institutions, or even the government. Offtakers provide market certainty for farmers, which in turn helps address some of the key challenges faced by Smallholders,[5,6,7]. Offtakers are usually involved in contract farming, where they agree to buy crops from farmers at a pre-agreed price. In addition, offtakers also often provide working capital, technical training, and other support to ensure that farmers can produce products with quality that meets market standards. Thus, offtakers help farmers in several ways, namely (i) income stability; (ii) access to capital; (iii) improved production and technology; and (iv) business sustainability [8]

With fixed price agreements in place, farmers can better plan their finances and reduce the risk of market price uncertainty. Offtakers often provide working capital or facilitate access to credit, allowing farmers to purchase necessary agricultural inputs without having to worry about capital constraints [9]. Through technical support and training, offtakers help farmers adopt better agricultural technologies, increase production efficiency, and improve crop quality. Market guarantees from offtakers provide incentives for farmers to invest in sustainable farming practices and improve soil quality and long-term crop yields.

Several case studies and empirical evidence show that partnerships between farmers and offtakers can bring significant positive impacts. For example, according to research conducted by [10], partnerships between large agribusiness companies and smallholders have successfully increased rice production and farmers' welfare, [11,12]. The study shows that fixed price agreements and technical support from offtakers help increase farmers' income, reduce the risk of market price uncertainty, and encourage the adoption of better agricultural technologies. This is in line with the findings of a previous study [13], which showed that offtakers provide market certainty for farmers and facilitate their access to working capital and credit, which in turn increases the productivity and sustainability of agricultural businesses.

Based on this background, this study aims to analysis in more depth how the role of offtakers can improve cooperation and competitiveness of agricultural businesses in West Java. This study aims to analyze the role of offtakers in improving cooperation and competitiveness of agricultural businesses. It will also explore how offtakers can support farmers in accessing capital, technology, and wider markets.

2. Materials and Methods

Agricultural Cluster

Agricultural clusters are livestock or agricultural organisations that are created from, by, and for farmers who know, are close to, trust, and have an interest in farming together with commonalities in customs, settlements, and the amount of land used for farming. They are established on the basis of shared interests, similar environmental conditions (social, economic, and resource-related), and familiarity to enhance and grow the businesses of their members [14].

An agricultural cluster is an institution that unites farmers horizontally and can be formed by several units in one village, based on commodities, agricultural planting areas and gender. Thus, to understand the movement of agricultural development, attention is needed to the agricultural clusters in the village. An agricultural cluster is defined as an institution at the farmer level that is formed to organize farmers in running their businesses [6].

Agricultural clusters essentially aim to mobilize farmers' human resources. The development of agricultural clusters plays a role in improving the knowledge, attitudes and skills of farmers. [11,14,15]. The agricultural cluster will help farmers who are members to facilitate all needs ranging from purchasing production facilities to post-harvest handling and marketing.

The agricultural cluster is also an important point for implementing and translating the concept of farmers' rights into policies, strategies and programs that are feasible in one complete unit and developed into operational steps [16,17]. Agricultural clusters have three main functions, namely as learning units, cooperation units and production units. If the three units are already running, they will be directed to become business group units. The success of agricultural clusters in carrying out these functions cannot be separated from the influence of members' hard work in group activities to achieve mutually agreed goals [18].

Off-Taker

Off-takers are parties that commit to purchase products or services from producers or providers at a predetermined price [19]. They often engage in long-term contracts to ensure stable supply and reduce market risk for producers [20]. With off-takers in place, producers or providers can secure markets for their products or services, reduce price risk, and increase revenue stability [21]. In addition, off-takers can also provide access to working capital, technical support, and other resources that help producers improve efficiency and product or service quality [22].

Offtakers can also help expand market access for producers or suppliers, both locally and internationally, which in turn can improve competitiveness and economic growth. The role of offtakers can be utilized in the form of partnerships that will have a positive impact on the development of agriculture in the future [23,24].

Partnership in the context of agricultural activities, there is an agreement called “contract farming” where the farmer and the party who will buy, also called the “contractor”, agree on a price for the farmer's produce in advance. This contractor can be a processing company or a trading/marketing company, acting as an offtaker, and can be private or public. In the implementation of this partnership, there is usually an agreement that includes production support from the contractor, such as input provision and technical assistance. Contract farming can be implemented based on the commitment of farmers to provide certain commodities in quantities and quality standards determined by the buyer (contractor), as well as the commitment of the contractor to support farmers' production and purchase these commodities [13].

The monopsony market feature of contract farming partnerships is one of the new hazards that farmers must contend with in this business model. Farmers will become even more dependent on the main firm as a result [25]. It's also thought that risk management development will raise the calibre of the contract farming model [26]. If farmers are unable to diversify their business, such as by producing multiple crops at once or earning money from non-farm pursuits, the situation would only worsen, particularly if there is a monopoly in the input market.

3. Methods

Systematic Literature Review (SLR) methodology is applied in this study. The SLR method is a research technique that involves finding, analysing, assessing, and interpreting all of the researcher's prior findings. The researcher then went over the findings of this earlier study by methodically going over and identifying the chosen research articles.

4. Results

According to [27], selecting and evaluating numerous publications is a necessary step for every researcher wishing to employ a strategy.

Table 1. Systematic Literature Review Result.

Researcher	Title	Objectives	Methods	Result
Asfaw Negassa Mohammad Jabbar (Paper to be presented at the 4th International Conference on Ethiopian Development StudiesAugust 2-4, 2007)	Commercial Offtake of Cattle under Smallholder Mixed Crop- Livestock Production System in Ethiopia, its Determinants and Implications for Improving Live Animal Supply for Export Abattoirs	Determine the variables that affect livestock producers' availability of live animals for sale and their involvement in the market.	Evaluate Ethiopia's highland areas' present commercial offtake of cattle and soybeans to address the paucity of empirical data on extraction rates.	These findings imply that lower livestock numbers are the cause of Ethiopia's limited market take from highland areas and emphasise the significance of raising livestock numbers to boost household market participation in highland areas. However, small farmers' restricted land ownership may limit the possibilities for raising animal numbers.
Amalia Arifah Rahman, Heri Pratikto, Ely Siswanto BRILLIANT INTERNATIONAL JOURNAL OF MANAGEMENT AND TOURISM (2022)	The Effect of Entrepreneurial Orientation on Firm Performance: The Role of Networking Capability	Analyse how an entrepreneurial mindset affects the performance of the organisation. The purpose of this study was also to investigate the function of network capability as a mediating factor in the association between entrepreneurial orientation and business performance.	Research on female entrepreneurs in the Batu City Entrepreneurs Association that is quantitative and using an explanatory methodology.	Developing MSME standardisation, training, network building, and trade mobility are necessary for the offtake system for MSMEs to be technically implemented and to support MSMEs.
Evi Triandini, I Gusti Ngurah Satria Wijaya, et,.al Proceedings of the International Conference on Industrial Engineering and Operations Management Manila, Philippines, March 7-9, 2023	Analysis Adoption of Information Technology Using the UTAUT Method on Off-taker Poultry Farmers in Indonesia	The purpose of this study is to ascertain the attitudes and practices of Bali's off-taker chicken producers about the implementation of information technology, specifically the Agree PT XYZ application.	In this study, the technology use framework (UTAUT) and integrated acceptance theory were employed as research methods. To gather study data, respondents in five Bali districts are given the questionnaire.	Behavioural intention is positively and significantly impacted by performance expectancy. Positive and noteworthy effects on use behaviour are attributed to behavioural intention and supportive circumstances. The research's originality and usefulness lie in how facility availability and performance affect chicken performance.
Muhammad Saleem, et,. al International Journal of Business Marketing and Management (IJBMM) Volume 3 Issue 7 July 2018, P.P. 01-30	Impact of Institutional Credit on Agriculture Production in Pakistan	This study aims to investigate the impact of institutional credit on agricultural production in Pakistan.	Time series analysis. The data used covers a ten-year period from 2003 to 2013, which includes total bank loans during that period.	The results show that production loans have a significant positive impact on agricultural production in Pakistan, with increasing these loans increasing the productivity of wheat, rice and cotton. However, development loans did not show a significant relationship with livestock production and tube well use, although there was a slight relationship with the number of tractors. The performance of the banking sector in meeting the targets set by the State Bank of Pakistan (SBP) is also considered satisfactory, with a consistent rate of fund recovery.
Nanik Risnawati JURNAL ILMIAH ABDIMAS P-ISSN: 2722-3485, E-ISSN: 2776-3803 Vol. 4 No. 1, Februari 2023	“Training and Capacity Building for Eligible SMEs” Kewirausahaan Sosial bagi Pemuda Bidang Pertanianpada Program Youth Entrepreneurship And Employment Support Service (YESS) di Bogor Jawa Barat	to increase entrepreneurship and social entrepreneurship among youth interested in agriculture.	Implementation of entrepreneurship and social entrepreneurship training for 24 participants who work as Offtakers in the agricultural sector, both on farm and off farm, and have achieved business achievements such as exports to various countries.	The participants have good entrepreneurial qualities in general, but still need to improve their self-confidence and ability to seek business opportunities. Therefore, they are encouraged to develop social entrepreneurship to provide benefits to society at large, especially to novice farmers who are potential beneficiaries.
Roby Faridudin, Yana FY Basori, Dine Meigawati Jurnal Administrasi Publik, 2022 December Vol. 20 No. 2, e-ISSN: 2615-7268	Implementation Of The One Region One Offtaker Policy In The Department Of Food Security, Agriculture And Fisheries Of Sukabumi City	At the Sukabumi City Department of Food Security, Agriculture, and Fisheries, ascertain how the one area, one offtaker policy is being implemented.	Qualitative method with a phenomenological approach. Interview 6 informants about	The adoption of One Region One Offtaker has significantly impacted Sukabumi's agricultural and fishery development, particularly in terms of raising farmer welfare.
Rahmat Yanuar, Netti Tinaprilla, Heri Harti, dan Meuthia Rachmania Journal of Indonesian Agribusiness Vol 10 No 1, Juni 2022; halaman 180-199	Dampak Kemitraan Closed Loop Terhadap Pendapatan dan Efisiensi Usahatani Cabai	The revenue and agricultural productivity of chilli growers in Garut and Sukabumi Regency who collaborate with non-partner farmers are affected.	Utilising a quantitative analytical approach, the level of efficiency of chilli farming commodities by partner and non-partner farmers in Garut and Sukabumi Regency was assessed using test analyses, farm income analysis, and income and cost comparison analysis (R/C Ratio).	The partnership model (Close Loop) has a positive impact on increasing the income and efficiency of chili farming.
Sofyan Sjaf, Ahmad Aulia Arsyad, Afan Ray Mahardika, Rajib Gandi, La Elson, Lukman Hakim, Zessy Ardinal Barlan, Rizki Budi Utami, Badar Muhammad,Sri Anom Amongjati, Sampean, Danang Aria Nugroho Heliyon, 2022, ISSN: 2405-8440, Vol: 8, Issue: 12, Page: e12012	Partnership 4.0: smallholder farmer partnership solutions	1) Acknowledge the current state of farmers and how they use their land; 2) Understand the distribution of agricultural products; 3) Recognise patterns of existing partnerships; and 4) Offer options for partnership patterns that benefit farmers.	Data Desa Presisi (DDP) is created by combining mixed methodologies with the Drone Participatory Mapping (DPM) approach.	P Through the use of technology and information that farmers can fully access, partnership 4.0 innovation aims to replace the traditional partnership pattern by enabling farmers to jointly control agricultural activities (upstream-downstream). In order for smallholders to gain and contribute to the wellbeing of smallholders, Partnership 4.0 puts farmers and offtakers on an equal footing.
Hemi H. Gandhi, Bram Hoex, Brett Jason Hallam Energy Strategy Reviews, Volume 43, 2022,100921, ISSN 2211-467X	Strategic investment risks threatening India’s renewable energy ambition	Assist interested parties in methodically comprehending these dangers and provide them with techniques for mitigating them.	Using a mix technique, new insights on the hazards facing the Indian real estate industry are presented. These insights were gathered over the course of 18 months from 40 primary research interviews with influential investors, independent power producers, consultants, and policymakers.	Outlining India's success in RE thus far and encouraging a methodical comprehension of investment risks in the field. There is discussion of nine key sector investment risks and the accompanying mitigation techniques: Risks associated with project development, offtaker relationships, stranded assets, volume, curtailment, regulatory compliance, inflation, exchange rate fluctuations, and tail risks
Adi Haryono, Mohamad Syamsul Maarif, Arif Imam Suroso dan Siti Jahroh Economies, 2023, 11: 185.	The Design of a Contract Farming Model for Coffee Tree Replanting	To improve the welfare of coffee farmers in Indonesia, arrange contract farming for the replanting of coffee trees.	The study's methodology, the Soft System Methodology (SSM), includes case studies from the Lampung region and interviews with a number of respondents who cultivate coffee.	Contract farming, which is devised with different models based on the degree of coordination and stakeholder involvement, is a potential solution to solve agricultural output limits on limited farmer resources and land ownership constraints by enterprises. The five main components are as follows: (1) funding; (2) expertise; (3) technology; (4) coffee production; and (5) collaboration amongst banks, businesses, and smallholders.

Table 1. Systematic Literature Review Result.

Researcher	Title	Objectives	Methods	Result
Asfaw Negassa Mohammad Jabbar (Paper to be presented at the 4th International Conference on Ethiopian Development StudiesAugust 2-4, 2007)	Commercial Offtake of Cattle under Smallholder Mixed Crop- Livestock Production System in Ethiopia, its Determinants and Implications for Improving Live Animal Supply for Export Abattoirs	Determine the variables that affect livestock producers' availability of live animals for sale and their involvement in the market.	Evaluate Ethiopia's highland areas' present commercial offtake of cattle and soybeans to address the paucity of empirical data on extraction rates.	These findings imply that lower livestock numbers are the cause of Ethiopia's limited market take from highland areas and emphasise the significance of raising livestock numbers to boost household market participation in highland areas. However, small farmers' restricted land ownership may limit the possibilities for raising animal numbers.
Amalia Arifah Rahman, Heri Pratikto, Ely Siswanto BRILLIANT INTERNATIONAL JOURNAL OF MANAGEMENT AND TOURISM (2022)	The Effect of Entrepreneurial Orientation on Firm Performance: The Role of Networking Capability	Analyse how an entrepreneurial mindset affects the performance of the organisation. The purpose of this study was also to investigate the function of network capability as a mediating factor in the association between entrepreneurial orientation and business performance.	Research on female entrepreneurs in the Batu City Entrepreneurs Association that is quantitative and using an explanatory methodology.	Developing MSME standardisation, training, network building, and trade mobility are necessary for the offtake system for MSMEs to be technically implemented and to support MSMEs.
Evi Triandini, I Gusti Ngurah Satria Wijaya, et,.al Proceedings of the International Conference on Industrial Engineering and Operations Management Manila, Philippines, March 7-9, 2023	Analysis Adoption of Information Technology Using the UTAUT Method on Off-taker Poultry Farmers in Indonesia	The purpose of this study is to ascertain the attitudes and practices of Bali's off-taker chicken producers about the implementation of information technology, specifically the Agree PT XYZ application.	In this study, the technology use framework (UTAUT) and integrated acceptance theory were employed as research methods. To gather study data, respondents in five Bali districts are given the questionnaire.	Behavioural intention is positively and significantly impacted by performance expectancy. Positive and noteworthy effects on use behaviour are attributed to behavioural intention and supportive circumstances. The research's originality and usefulness lie in how facility availability and performance affect chicken performance.
Muhammad Saleem, et,. al International Journal of Business Marketing and Management (IJBMM) Volume 3 Issue 7 July 2018, P.P. 01-30	Impact of Institutional Credit on Agriculture Production in Pakistan	This study aims to investigate the impact of institutional credit on agricultural production in Pakistan.	Time series analysis. The data used covers a ten-year period from 2003 to 2013, which includes total bank loans during that period.	The results show that production loans have a significant positive impact on agricultural production in Pakistan, with increasing these loans increasing the productivity of wheat, rice and cotton. However, development loans did not show a significant relationship with livestock production and tube well use, although there was a slight relationship with the number of tractors. The performance of the banking sector in meeting the targets set by the State Bank of Pakistan (SBP) is also considered satisfactory, with a consistent rate of fund recovery.
Nanik Risnawati JURNAL ILMIAH ABDIMAS P-ISSN: 2722-3485, E-ISSN: 2776-3803 Vol. 4 No. 1, Februari 2023	“Training and Capacity Building for Eligible SMEs” Kewirausahaan Sosial bagi Pemuda Bidang Pertanianpada Program Youth Entrepreneurship And Employment Support Service (YESS) di Bogor Jawa Barat	to increase entrepreneurship and social entrepreneurship among youth interested in agriculture.	Implementation of entrepreneurship and social entrepreneurship training for 24 participants who work as Offtakers in the agricultural sector, both on farm and off farm, and have achieved business achievements such as exports to various countries.	The participants have good entrepreneurial qualities in general, but still need to improve their self-confidence and ability to seek business opportunities. Therefore, they are encouraged to develop social entrepreneurship to provide benefits to society at large, especially to novice farmers who are potential beneficiaries.
Roby Faridudin, Yana FY Basori, Dine Meigawati Jurnal Administrasi Publik, 2022 December Vol. 20 No. 2, e-ISSN: 2615-7268	Implementation Of The One Region One Offtaker Policy In The Department Of Food Security, Agriculture And Fisheries Of Sukabumi City	At the Sukabumi City Department of Food Security, Agriculture, and Fisheries, ascertain how the one area, one offtaker policy is being implemented.	Qualitative method with a phenomenological approach. Interview 6 informants about	The adoption of One Region One Offtaker has significantly impacted Sukabumi's agricultural and fishery development, particularly in terms of raising farmer welfare.
Rahmat Yanuar, Netti Tinaprilla, Heri Harti, dan Meuthia Rachmania Journal of Indonesian Agribusiness Vol 10 No 1, Juni 2022; halaman 180-199	Dampak Kemitraan Closed Loop Terhadap Pendapatan dan Efisiensi Usahatani Cabai	The revenue and agricultural productivity of chilli growers in Garut and Sukabumi Regency who collaborate with non-partner farmers are affected.	Utilising a quantitative analytical approach, the level of efficiency of chilli farming commodities by partner and non-partner farmers in Garut and Sukabumi Regency was assessed using test analyses, farm income analysis, and income and cost comparison analysis (R/C Ratio).	The partnership model (Close Loop) has a positive impact on increasing the income and efficiency of chili farming.
Sofyan Sjaf, Ahmad Aulia Arsyad, Afan Ray Mahardika, Rajib Gandi, La Elson, Lukman Hakim, Zessy Ardinal Barlan, Rizki Budi Utami, Badar Muhammad,Sri Anom Amongjati, Sampean, Danang Aria Nugroho Heliyon, 2022, ISSN: 2405-8440, Vol: 8, Issue: 12, Page: e12012	Partnership 4.0: smallholder farmer partnership solutions	1) Acknowledge the current state of farmers and how they use their land; 2) Understand the distribution of agricultural products; 3) Recognise patterns of existing partnerships; and 4) Offer options for partnership patterns that benefit farmers.	Data Desa Presisi (DDP) is created by combining mixed methodologies with the Drone Participatory Mapping (DPM) approach.	P Through the use of technology and information that farmers can fully access, partnership 4.0 innovation aims to replace the traditional partnership pattern by enabling farmers to jointly control agricultural activities (upstream-downstream). In order for smallholders to gain and contribute to the wellbeing of smallholders, Partnership 4.0 puts farmers and offtakers on an equal footing.
Hemi H. Gandhi, Bram Hoex, Brett Jason Hallam Energy Strategy Reviews, Volume 43, 2022,100921, ISSN 2211-467X	Strategic investment risks threatening India’s renewable energy ambition	Assist interested parties in methodically comprehending these dangers and provide them with techniques for mitigating them.	Using a mix technique, new insights on the hazards facing the Indian real estate industry are presented. These insights were gathered over the course of 18 months from 40 primary research interviews with influential investors, independent power producers, consultants, and policymakers.	Outlining India's success in RE thus far and encouraging a methodical comprehension of investment risks in the field. There is discussion of nine key sector investment risks and the accompanying mitigation techniques: Risks associated with project development, offtaker relationships, stranded assets, volume, curtailment, regulatory compliance, inflation, exchange rate fluctuations, and tail risks
Adi Haryono, Mohamad Syamsul Maarif, Arif Imam Suroso dan Siti Jahroh Economies, 2023, 11: 185.	The Design of a Contract Farming Model for Coffee Tree Replanting	To improve the welfare of coffee farmers in Indonesia, arrange contract farming for the replanting of coffee trees.	The study's methodology, the Soft System Methodology (SSM), includes case studies from the Lampung region and interviews with a number of respondents who cultivate coffee.	Contract farming, which is devised with different models based on the degree of coordination and stakeholder involvement, is a potential solution to solve agricultural output limits on limited farmer resources and land ownership constraints by enterprises. The five main components are as follows: (1) funding; (2) expertise; (3) technology; (4) coffee production; and (5) collaboration amongst banks, businesses, and smallholders.

5. Discussion

These studies show that offtakers in agricultural clusters play an important role in various aspects, such as increasing production, adopting technology, accessing credit, and developing entrepreneurship. Small livestock numbers are the root reason of Ethiopia's low livestock market participation, according to research by Asfaw Negassa and [28]. Offtakers can support increasing livestock production by offering a stable market with profitable prices. In order to promote agricultural MSMEs, [29] emphasise the significance of designing MSME standardisation, training, and network strengthening, which can be aided by offtakers.

Research by [15,30] show that the adoption of information technology by poultry farm offtakers can improve supply chain efficiency and reliability through monitoring product quality and optimizing logistics. [31] found that institutional credit has a significant impact on agricultural production, where offtakers can help farmers access credit more easily through product purchase guarantees. [32], emphasizes the importance of social entrepreneurship training for youth in the agricultural sector, where offtakers can function as mentors and training providers to help young farmers develop entrepreneurial skills and identify market opportunities. Overall, offtakers in agricultural clusters can contribute significantly to increasing production, market access, technology adoption, and entrepreneurship development, which ultimately improves farmers' welfare and their participation in the market, [33,34,35].

In Indonesia's vibrant agricultural landscape, the People's Business Credit (KUR) program has significantly transformed opportunities for local communities by empowering Micro, Small, and Medium Enterprises (MSMEs). The relationship between the KUR program and offtakers in Indonesia's agricultural sector exemplifies a symbiotic partnership aimed at enhancing economic opportunities and market dynamics for these enterprises, [36,37].

Figure 1: is the model developed for the distribution of Kredit Usaha Rakyat (KUR) downstream credit assistance:

• Financial Support Channels: KUR funds are disbursed through established Financial Institutions and Savings and Loans Cooperatives (KSPs), ensuring equitable access to financing for Cluster MSMEs across the archipelago.
• Role of Offtakers: Companies and cooperatives act as vital offtakers, purchasing goods directly from Cluster MSMEs. This direct link fosters a sustainable market environment.
• Empowering MSMEs: Within cooperative frameworks, Cluster MSMEs determine fair prices independently, bypassing traditional middlemen. This autonomy enhances profitability and economic resilience.
• Facilitated Funding: Each MSME within the cluster can access up to Rp 500 million in KUR funding, supported by advanced digital tools, AI technologies, and robust credit scoring mechanisms. This streamlined process ensures efficient resource allocation.
• Support from LPDB: The People's Business Credit Board (LPDB) plays a pivotal role by providing crucial support such as working capital, investment funding, and comprehensive training and mentoring programs tailored to the needs of cooperatives.
• Dual Roles of Cooperatives: Cooperatives serve dual functions as KUR Distributors (KSPs) and Offtakers (Production Cooperatives), bridging financial gaps and stimulating local economic growth.
• Value Addition: Offtakers play a transformative role by processing raw materials into downstream products, thereby adding significant value before these products enter the market, [38,39,40].
• Global Reach: Products originating from these MSME clusters are not only marketed domestically but also internationally, showcasing Indonesia's agricultural prowess on the global stage.

In essence, the collaboration between the KUR program and offtakers underscores a strategic alignment aimed at promoting sustainable development, empowering local entrepreneurs, and enhancing the overall competitiveness of Indonesia's agricultural sector, [41,42]. This integrated approach not only supports economic resilience but also fosters inclusive growth across diverse regions of the country, ultimately benefiting communities and stakeholders nationwide. Controls that contribute positively to the control of the model built are collaborative partnerships, stakeholder participation and professional development in SME entities, [43].

The benefits of having agricultural off takers are:

The following is a discussion of research results related to the off taker concept in the agricultural cluster, in the form of short points:

• Increased Production: Off takers can provide a stable market and favourable prices to encourage increased production in areas with limited market participation.
• Strengthening Agricultural MSMEs: Off takers can help design MSME standardization, provide training, and strengthen networks to improve the performance and trade mobility of agricultural MSMEs.
• Technology Adoption: Off takers can encourage the adoption of information technology by farmers, increasing the efficiency and reliability of the supply chain through monitoring product quality and optimizing logistics.
• Institutional Credit Access: Off takers can help farmers access credit more easily through product purchase guarantees, which in turn increases agricultural production.
• Social Entrepreneurship Development: Off takers can serve as mentors and social entrepreneurship training providers for young farmers, helping them develop entrepreneurial skills and identify market opportunities.

Overall, offtakers in agricultural clusters can contribute significantly to various aspects such as increasing production, market access, technology adoption, and entrepreneurship development, which ultimately increases the welfare of farmers and their participation in the market.

In addition to the off-taker’s position, the following factors should be taken into account:

• Good institutional governance: This is essential to guaranteeing that small-scale agricultural business organisations have an efficient and transparent decision-making process, a well-defined organisational structure, and good standard operating procedures. Effective resource management, heightened responsibility, and the development of trust within and beyond the company are all facilitated by good governance.
• Sufficient Data Gathering: Information is a crucial resource for business decision-making. Good data collection for micro-scale agricultural enterprises comprises meteorological, soil, production, and market information. When there is enough data available, business owners may evaluate their performance, spot industry trends, and make well-founded judgements.
• Adaptability to Current Conditions: Weather, commodity pricing, and governmental regulations are just a few examples of the external elements that have a big impact on agricultural enterprises. It's critical to react quickly to these changes in order to preserve business continuity. This calls for the capacity to change course rapidly, modify marketing and production plans, and seize new possibilities as they present themselves.
• Creation of New Technology: Technology is always evolving and has the potential to significantly boost production and efficiency in small-scale farming. Reducing risks and raising agricultural yields can be achieved by implementing technologies for farm management, such as mobile applications, real-time weather monitoring, smart irrigation, and soil sensors.

6. Conclusions

The agricultural sector plays a vital role in the economies of many countries, particularly in developing nations, serving as a primary source of livelihood for millions and contributing significantly to national GDP, food security, and social stability. However, farmers often face numerous challenges, including limited access to capital, market price volatility, and inadequate technology. These challenges hinder productivity and welfare, jeopardizing the long-term sustainability of agriculture.

In addressing these challenges, the role of offtakers emerges as crucial. Offtakers, entities committing to purchase agricultural produce at predetermined prices, provide market certainty for farmers, thereby mitigating some key challenges. Through involvement in contract farming and provision of capital, technical support, and market access, offtakers assist farmers in achieving income stability, accessing capital, adopting better technologies, and ensuring business sustainability.

A systematic literature review reveals various studies emphasizing the importance of offtakers in agricultural clusters. Research findings illustrate that offtakers contribute to increased production, technology adoption, access to credit, and entrepreneurship development. By providing stable markets, favorable prices, and support services, offtakers empower farmers, enhance supply chain efficiency, and improve overall welfare.

The benefits of having agricultural offtakers are multifaceted, ranging from increased production to the development of entrepreneurial skills among farmers. Therefore, fostering partnerships between farmers and offtakers is imperative for enhancing agricultural competitiveness, sustainability, and farmer welfare. By harnessing the potential of offtakers and promoting collaboration within agricultural clusters, policymakers and stakeholders can create an enabling environment for thriving agricultural ecosystems, thereby ensuring food security and economic prosperity in rural communities. Other factors that can increase the role of offtakers in the agricultural industrial sector are good institutional governance, adequate data collection, and agility to face current conditions and the development of new technology in micro-scale business entities in the agricultural business.