Institutional dynamics, stakeholder interactions, and sustainability pathways in North Toraja's Arabica coffee sector: a systems approach to inclusive agribusiness transformation

Abstract

Introduction: North Toraja's Arabica coffee sector-recognized for its distinctive quality and protected by Geographical Indication (GI) status-continues to face sustainability challenges shaped by institutional dynamics, power asymmetries, and socio-cultural contexts. Despite strong international demand, smallholder farmers contend with aging plantations, climate variability, weak bargaining power, and fragmented governance that constrain access to resources and influence over decision-making. Methods: This study adopts a systems thinking approach using interpretive structural modeling (ISM) to examine stakeholder interactions, map systemic constraints, and identify leverage points for inclusive transformation. Data were collected through in-depth interviews, expert questionnaires, and field observations involving farmers, cooperatives, traders, small and medium enterprises, and government agencies, and were supplemented with secondary sources. Results: The ISM results indicate that upstream institutional strategies-particularly minimum price guarantees and certified seed systems-exert the strongest driving power, shaping the feasibility of downstream initiatives across the value chain. Conversely, interventions such as youth engagement, post-harvest innovation, and digital marketing show high dependence on enabling governance, coordinated action, and sustained institutional support. Key barriers include intermediary dominance and the absence of sustained cross-actor collaboration. Discussion: These findings suggest that sustainable transformation requires linking top-down governance reforms with bottom-up empowerment to rebalance bargaining power and strengthen local agency. Multi-stakeholder platforms, inclusive decision-making processes, and context-sensitive institutional arrangements can improve coordination and unlock dependent initiatives. As a novel contribution, the study moves beyond descriptive stakeholder mapping by structurally ranking sustainability interventions and barriers according to their driving-dependence relationships, thereby identifying actionable institutional leverage points for GI-protected, smallholder coffee value chains. By integrating institutional, social, and economic perspectives, this study advances a sociologically grounded framework for agribusiness transformation, offering transferable insights for other smallholder-dominated commodity systems in the Global South.

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