Circular Economy Adaptation by Creating Small Business Based on Agri-Food Waste in Rural Enterprises in East Java, Indonesia

Abstract

Indonesia's circular economy (CE) faces challenges like lack of information exchange, inadequate material flow, and inadequate regulations. Agri-food waste is crucial for implementing circular economy, but lack of government support, regulations, and infrastructure hinders its development. This research aims to develop macroeconomic strategies to strengthen agri-food waste management businesses in Kerto Rahardjo and apply circular economy approaches. The research object lies in Kerto Rahardjo, a part of the village tourism institution with the potential for agri-food waste. However, there have yet to be sustained efforts to manage this agri-food waste in this area. Thus, the circular economy is one option in Kerto Rahardjo since circular economy emphasizes closed-loop material flows and efficient resource utilization and brings economic benefits in advance. Since this program will be a pilot project, the approach method used is Strengths, Weakness, Threats, and Opportunities (SWOT) analysis and IFAS and EFAS methods. The result reveals that the total EFAS is 2,89 and the IFAS is 2,70. Kerto Rahardjo falls in quadrant 1, signifying progress in implementing a circular economy business model through agri-food waste. Implementing supportive regulations aligned with circular activities can facilitate the sustainability of business models, including empowering women, establishing formal institutions, and supporting technological innovation.