VALUE ADDITION, PROFITABILITY, AND STRATEGIC DEVELOPMENT OF THE SOUTH SULAWESI SAGO AGRO-INDUSTRY

Muh Taufik; Andi Yulyani Fadwiwati; Muslimin; M Basir Nappu; Amiruddin Syam; Sahardi; Wardah Mustafa; Muh Asaad; Sri Bananiek Sugiman; Syuryawati; Herniwati; Ida Andriani; Rahmi Hanuddin; Maryam Nurdin; Arini Putri Hanifa

doi:10.15575/gdcs.v66i.3405

Authors

Muh Taufik Research Center for Macroeconomics and Finance, Indonesia
Andi Yulyani Fadwiwati Research Center for Behavioral and Circular Economics, Indonesia
Muslimin Research Center for Behavioral and Circular Economics, Indonesia
M Basir Nappu Research Center for Food Crops, Indonesia
Amiruddin Syam Research Center for Macroeconomics and Finance, Indonesia
Sahardi Research Center for Food Crops, Indonesia
Wardah Mustafa Research Center for Horticulture, Indonesia
Muh Asaad Research Center for Horticulture, Indonesia
Sri Bananiek Sugiman Research Center for Behavioral and Circular Economics, Indonesia
Syuryawati Research Center for Food Crops, Indonesia
Herniwati Research Center for Food Crops, Indonesia
Ida Andriani Research Center for Behavioral and Circular Economics, Indonesia
Rahmi Hanuddin Research Center for Horticulture, Indonesia
Maryam Nurdin Research Center for Behavioral and Circular Economics, Indonesia
Arini Putri Hanifa Research Center for Food Crops, Indonesia

DOI:

https://doi.org/10.15575/gdcs.v66i.3405

Keywords:

Added value, agroindustry, Hayami method, partial budget, SWOT, sago

Abstract

Sago is more than just a crop; it is a strategic asset for food security and a versatile industrial raw material. However, its true economic potential lies in agro-industrial transformation. This study examines how sago processing adds value and supports local livelihoods in North Luwu and Palopo, South Sulawesi. By combining the Hayami method for value-added analysis with partial budgeting and SWOT frameworks, we assessed the profitability of different processing stages and identified a path forward for the industry. Our findings reveal a sharp divide in economic outcomes. While wet and dry processing generate high value-added margins (over 40%), the milling stage remains below 15%. Interestingly, milling is actually the most efficient profit-maker, yielding a rate of 85.71%—far higher than drying or wet processing. This profitability extends to the people on the ground; with an R/C ratio of 1.6, sago processing is a highly viable business. However, a significant income gap persists, with loggers and processors earning roughly 25% more than the landowners who provide the raw material. To move the industry forward, the focus must shift toward farmer-led corporations and better land mapping. By establishing regional sago institutions and investing in infrastructure and human capital, South Sulawesi can move beyond basic milling into high-value derivative industries. These steps are essential to turning sago from a traditional staple into a modern industrial engine for the region.

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