Dynamic simulation model of salt supply chain to increase farmers income

Abstract

The average national salt production is around 2.5 million tons per year has not been able to meet domestic salt demands. One of the factors that caused this was the low incentives received by farmers so that farmers were reluctant to carry out production in the following year. As the main actor in the national salt industry, farmer's welfare needs to be considered to ensure the sustainability of salt production. This study aims to develop a dynamic model of the salt production supply chain by identifying internal and external factors that influence the system. We use system dynamic methods because this framework can model nonlinear equations among variables and can represent feedbacks loop relationships. From the base model simulation results, we developed a scenario to improve the welfare of salt farmers. By using the scenario of land intensification with filtering-threaded technology, geomembrane, and tunnel system, farmer's profits could be increased up to Rp 13,830,300 per ha per season in the shortest dry season.