In the heart of Indonesia, a groundbreaking study led by Budisantoso Wirjodirdjo from the Sepuluh Nopember Institute of Technology is reshaping the future of smallholder sugarcane agribusiness. The research, published in the journal *Agricultural and Resource Economics* (translated as *Ekonomi Pertanian dan Sumber Daya*), employs a system dynamics approach to integrate Circular Economy (CE) principles into smallholder farming systems, offering a beacon of hope for sustainable development in developing countries.
The study addresses critical socioeconomic and environmental challenges faced by smallholder agribusinesses, which are the backbone of rural economies. By simulating two CE strategies—Repair (R4) and Repurpose (R7)—over a decade, the research evaluates key indicators such as farmers’ income savings, product diversification, job creation, and solid waste reduction. The findings are promising: the R4 strategy reduces unexpected costs and increases farmers’ savings by 37.5%, while the R7 strategy significantly reduces solid waste by 17.4% and creates new employment opportunities across various skill levels.
“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,” Wirjodirdjo explains. The study fills a critical gap by focusing on small-scale farming systems in developing countries, providing a holistic evaluation of circular strategies.
The practical implications of this research are vast. 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.
The energy sector, in particular, stands to benefit from these findings. As the world shifts towards renewable energy sources, the demand for sustainable raw materials like sugarcane increases. By adopting CE principles, smallholder farmers can not only enhance their economic stability but also contribute to a more sustainable energy sector.
“This study demonstrates the feasibility of implementing early-stage circular strategies in smallholder systems with limited capital and infrastructure,” Wirjodirdjo notes. The model offers a replicable framework for similar contexts, paving the way for a more sustainable and resilient future.
As the world grapples with the pressing need for sustainable development, this research provides a roadmap for smallholder sugarcane agribusinesses to thrive in the face of socioeconomic and environmental challenges. By embracing Circular Economy principles, these farming systems can achieve socioeconomic and environmental sustainability, contributing to the broader goals of sustainable development.