Enhancing Organizational Capacity for Sustainable Rural Development: Evidence from Transmigration Areas in Indonesia

Previous studies on rural development and agribusiness value chains have largely examined these issues separately, with limited attention to how organizational capacity shapes value chain performance and sustainable rural development outcomes in transmigration areas. This gap is particularly important in emerging rural regions where institutional constraints, market dependency, and limited coordination continue to hinder local economic transformation. This study examines the role of organizational capacity in shaping value chain performance and its implications for sustainable rural development in transmigration areas. Using a qualitative case study approach, data were collected through in-depth interviews, field observations, focus group discussions, and secondary data analysis. The data were analyzed using thematic analysis supported by NVivo software, with triangulation applied to ensure validity and reliability. The findings reveal that although local institutions—such as village-owned enterprises (BUMDes), cooperatives, and farmer groups—are present, their organizational capacity remains limited, particularly in managerial skills, coordination, and aggregation functions. This limitation leads to inefficient value chain performance, characterized by low bargaining power, high dependency on intermediaries, high logistics costs, and limited value-added creation. Consequently, rural income remains suboptimal, social dependency is high, and environmental sustainability risks are insufficiently managed. The study contributes to the literature by demonstrating that organizational capacity acts as a structural determinant of value chain performance, which in turn influences sustainable rural development outcomes. It also proposes a capacity strengthening model integrating human resources, institutional capacity, stakeholder networks, and technology. Policy implications emphasize strengthening local institutions, promoting value chain digitalization, and implementing data-driven interventions. The study highlights that strengthening organizational capacity is a strategic pathway toward achieving sustainable rural development, particularly in emerging rural contexts such as transmigration areas.