Risk in the Supply Chain of Organic Rice: An Example from Mojokerto Regency, Indonesia

Abstract

The aims of this study were determining the priority of risk agents and determining the risk mitigation in the supply chain of organic rice. An empirical study was carried out at “Manajemen Usaha Tani Hasil Organik Seloliman” (MUTHOS) as a business organization of organic rice in Seloliman Sub-district, Trawas District, Mojokerto Regency, East Java, Indonesia. This research used 2 phases of the House of Risk (HOR) method. Risks and risk agent identification were done in HOR 1 then the risk mitigations determined in HOR 2. The results of this study showed that 29 risks caused by 26 risk agents were identified in business activities of MUTHOS; as a result, 2 risk agents to be mitigated were chosen based on the value of Aggregate Risk Potential (ARP). There were 12 risk mitigations to be considered in mitigation of the chosen risk agents. These risk mitigations then were prioritized based on their effectiveness when being applied. The first priority of risk mitigation to be put into practice was training employees in the handling of the rice after it was harvested and in the management system. Keywords—Aggregate risk potential, Organic rice, Risk Agents, Risk mitigations, Supply chain