Driving forces for sustainable development of smallholder sugarcane agribusiness: a system dynamics approach to circular economy strategies
Purpose. This study aims to develop a dynamic model based on Circular Economy (CE) principles to evaluate the sustainability of smallholder sugarcane agribusiness. The model addresses socioeconomic and environmental challenges in developing countries, improving income stability, product diversificat...
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| Format: | Article |
| Language: | English |
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Institute of Eastern European Research and Consulting
2025-06-01
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| Series: | Agricultural and Resource Economics |
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| Online Access: | https://are-journal.com/are/article/view/981 |
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| author | Budisantoso Wirjodirdjo Ahmad Fatih Fudhla Moses Laksono Singgih Hafidz Ridho |
| author_facet | Budisantoso Wirjodirdjo Ahmad Fatih Fudhla Moses Laksono Singgih Hafidz Ridho |
| author_sort | Budisantoso Wirjodirdjo |
| collection | DOAJ |
| description | Purpose. This study aims to develop a dynamic model based on Circular Economy (CE) principles to evaluate the sustainability of smallholder sugarcane agribusiness. The model addresses socioeconomic and environmental challenges in developing countries, improving income stability, product diversification, job creation across all skills, and solid waste reduction.
Methodology / approach. Smallholder agribusinesses are pivotal for rural economies but face sustainability challenges. This study addresses these challenges through CE principles. A System Dynamics approach was used to evaluate the impacts of two CE strategies (R4-Repair and R7-Repurpose). A 10-year simulation evaluates key indicators, including farmers’ income savings, product diversification, job creation, and solid waste reduction. Data was obtained from government reports, industry statistics, and stakeholder interviews.
Results. The findings reveal that the R4 strategy reduces unexpected costs, stabilises income, and increases farmers’ savings by 37.5 %. Meanwhile, the R7 strategy generates the most significant impact, with a 17.4 % reduction in solid waste and the creation of new employment opportunities at various skill levels. Together, these strategies support socioeconomic and environmental sustainability. The model also demonstrates the feasibility of implementing early-stage circular strategies in smallholder systems with limited capital and infrastructure, offering a replicable framework for similar contexts.
Originality / scientific novelty. This research offers a novel application of System Dynamics modelling in smallholder agribusiness, integrating CE principles to address the interplay between socioeconomic and environmental factors. The study fills a critical gap by focusing on small-scale farming systems in developing countries, providing a holistic evaluation of circular strategies.
Practical value / implications. The proposed model provides actionable insights for policymakers and agribusiness stakeholders to design adaptive strategies, optimise resource use, and promote sustainable development. It is particularly relevant for agrarian economies facing similar socioeconomic challenges, fostering economic resilience and sustainability. |
| format | Article |
| id | doaj-art-5c9e7700701f4158a69ee5430c34614a |
| institution | Kabale University |
| issn | 2414-584X |
| language | English |
| publishDate | 2025-06-01 |
| publisher | Institute of Eastern European Research and Consulting |
| record_format | Article |
| series | Agricultural and Resource Economics |
| spelling | doaj-art-5c9e7700701f4158a69ee5430c34614a2025-08-20T04:00:01ZengInstitute of Eastern European Research and ConsultingAgricultural and Resource Economics2414-584X2025-06-0111232–6432–6410.51599/are.2025.11.02.021059Driving forces for sustainable development of smallholder sugarcane agribusiness: a system dynamics approach to circular economy strategiesBudisantoso Wirjodirdjo0https://orcid.org/0000-0002-9463-1393Ahmad Fatih Fudhla1https://orcid.org/0000-0002-5812-4546Moses Laksono Singgih2https://orcid.org/0000-0002-6200-6411Hafidz Ridho3https://orcid.org/0000-0002-7497-3230Institut Teknologi Sepuluh NopemberInstitut Teknologi Sepuluh Nopember; Universitas Maarif Hasyim LatifInstitut Teknologi Sepuluh NopemberInstitut Teknologi Sepuluh NopemberPurpose. This study aims to develop a dynamic model based on Circular Economy (CE) principles to evaluate the sustainability of smallholder sugarcane agribusiness. The model addresses socioeconomic and environmental challenges in developing countries, improving income stability, product diversification, job creation across all skills, and solid waste reduction. Methodology / approach. Smallholder agribusinesses are pivotal for rural economies but face sustainability challenges. This study addresses these challenges through CE principles. A System Dynamics approach was used to evaluate the impacts of two CE strategies (R4-Repair and R7-Repurpose). A 10-year simulation evaluates key indicators, including farmers’ income savings, product diversification, job creation, and solid waste reduction. Data was obtained from government reports, industry statistics, and stakeholder interviews. Results. The findings reveal that the R4 strategy reduces unexpected costs, stabilises income, and increases farmers’ savings by 37.5 %. Meanwhile, the R7 strategy generates the most significant impact, with a 17.4 % reduction in solid waste and the creation of new employment opportunities at various skill levels. Together, these strategies support socioeconomic and environmental sustainability. The model also demonstrates the feasibility of implementing early-stage circular strategies in smallholder systems with limited capital and infrastructure, offering a replicable framework for similar contexts. Originality / scientific novelty. This research offers a novel application of System Dynamics modelling in smallholder agribusiness, integrating CE principles to address the interplay between socioeconomic and environmental factors. The study fills a critical gap by focusing on small-scale farming systems in developing countries, providing a holistic evaluation of circular strategies. Practical value / implications. The proposed model provides actionable insights for policymakers and agribusiness stakeholders to design adaptive strategies, optimise resource use, and promote sustainable development. It is particularly relevant for agrarian economies facing similar socioeconomic challenges, fostering economic resilience and sustainability.https://are-journal.com/are/article/view/981circular agriculturesmallholder sugarcane agribusinesssystem dynamics approachwaste managementsustainable agribusiness modelsocioeconomic and environmental indicatorssustainable development goals. |
| spellingShingle | Budisantoso Wirjodirdjo Ahmad Fatih Fudhla Moses Laksono Singgih Hafidz Ridho Driving forces for sustainable development of smallholder sugarcane agribusiness: a system dynamics approach to circular economy strategies Agricultural and Resource Economics circular agriculture smallholder sugarcane agribusiness system dynamics approach waste management sustainable agribusiness model socioeconomic and environmental indicators sustainable development goals. |
| title | Driving forces for sustainable development of smallholder sugarcane agribusiness: a system dynamics approach to circular economy strategies |
| title_full | Driving forces for sustainable development of smallholder sugarcane agribusiness: a system dynamics approach to circular economy strategies |
| title_fullStr | Driving forces for sustainable development of smallholder sugarcane agribusiness: a system dynamics approach to circular economy strategies |
| title_full_unstemmed | Driving forces for sustainable development of smallholder sugarcane agribusiness: a system dynamics approach to circular economy strategies |
| title_short | Driving forces for sustainable development of smallholder sugarcane agribusiness: a system dynamics approach to circular economy strategies |
| title_sort | driving forces for sustainable development of smallholder sugarcane agribusiness a system dynamics approach to circular economy strategies |
| topic | circular agriculture smallholder sugarcane agribusiness system dynamics approach waste management sustainable agribusiness model socioeconomic and environmental indicators sustainable development goals. |
| url | https://are-journal.com/are/article/view/981 |
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