Transaction Costs, Asymmetric Information, and Market Access among Small-Scale Salt Farmers in Indonesia

Authors

  • Kusairi Kusairi Business and Hospitality Department, Faculty of Vocational Studies, Universitas Brawijaya
  • Eko Prasetyo Business and Hospitality Department, Faculty of Vocational Studies, Universitas Brawijaya

DOI:

https://doi.org/10.26905/jrei.v6i2.16640

Keywords:

Asymmetric information, Institutional arrangements, Market access, Salt farmers, Transaction costs

Abstract

This study examines transaction costs in the marketing of salt produced by small-scale farmers in Indonesia, focusing on the institutional arrangements that shape market access and farmer dependency. Using qualitative research design with a phenomenological approach, data were collected through in-depth interviews and document analysis involving salt farmers, intermediaries, letter owners, and related institutional actors in Pesanggrahan Village, Bangkalan Regency. The findings reveal that transaction costs arise primarily from asymmetric information, negotiation processes, and contractual constraints, particularly through the requirement to rent road permits issued by intermediaries to access salt processing firms. These costs, incurred outside production activities, limit farmers’ ability to sell directly to factories and weaken their bargaining position. As a result, farmers become structurally dependent on intermediaries within the salt supply chain. This study contributes to the transaction cost economics literature by highlighting how informal institutional arrangements and market regulations generate persistent inefficiencies and dependency among small-scale agricultural producers, with important implications for policy interventions aimed at improving farmer autonomy and market efficiency.

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Published

2026-01-19

Issue

Vol. 6 No. 2 (2025): Agustus 2025

Section

Articles

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