This study examines the marketing efficiency and farmers’ income share within the rice grain industry of Pidie Regency, Aceh, Indonesia, with a focus on the institutional and structural determinants of value distribution. The research addresses the persistent imbalance in Indonesia’s agricultural marketing system, where smallholder farmers—despite being primary producers—receive disproportionately low returns compared to intermediaries. Employing a mixed-methods approach, the study integrates quantitative analyses of marketing margins, farmer’s share, and efficiency ratios with qualitative insights from in-depth interviews and field observations involving 200 farmers and traders. The results reveal that the rice marketing chain is dominated by collectors, who control transportation, financing, and price information, resulting in asymmetric market power. In the farmer–collector stage, farmers’ share reached 94.3% with an efficiency ratio of 1.43%, while in the collector–mill stage it declined sharply to 44% with an efficiency ratio of 14%. These findings demonstrate that marketing inefficiency stems less from technical constraints than from institutional weaknesses—particularly the passive role of cooperatives, information asymmetry, and inadequate post-harvest infrastructure. The study recommends transforming cooperatives into autonomous agribusiness entities, promoting digital price transparency platforms, improving rural infrastructure, and fostering youth agripreneurship as pathways toward equitable market reform. This research contributes to the broader literature on institutional economics and supply chain governance by proposing a paradigm shift from the “Green Revolution” to a “Market Revolution”—a development model that aligns productivity with fairness and sustainability in Indonesia’s agricultural value chains.
Ritonga et al. (Sat,) studied this question.