When the neediest are the least ready: Open business models in Indonesian banana value chains

This study challenges the narrative that open business models drive inclusive agricultural development. A comparative case study of Indonesian banana value chains confirms that an open, cooperative-mediated export model is associated with lower transaction costs, reduced information asymmetry, and greater financial inclusion than a closed, middleman-dominated domestic model. However, four critical complications have emerged. First, the transparency of the open model is superficial; cooperative management remains obscure to members, revealing that outward openness masks inward closures. Second, farmers do not commit to one model but maintain portfolio strategies, retaining ties to the closed system as insurance against open-system risks. Third, a break-even analysis shows that the closed system's credit terms dominate formal options when the harvest failure probability exceeds approximately 37% under the median-rate and full-waiver assumptions—an illustrative scenario rather than a general empirical threshold, because the threshold ranges from 26% to above 100% across the observed rate and waiver combinations, indicating that closed models persist through competitiveness, not merely exploitation. Fourth, the wide interest rate dispersion within the closed model (48–150%) reveals an internal spectrum from extractive to relational intermediaries. This study makes three contributions: nested closure, portfolio rather than binary adoption, and a Capability–Need Inversion Paradox advanced as a theory-generating proposition supported by preliminary researcher-rated evidence and by the captured-openness, dominance-region, and intermediary-gradient findings. These findings challenge simplistic openness-development narratives and provide a framework for understanding business model dynamics in asymmetric institutional contexts, where relational complexity, risk management, and local adaptation fundamentally shape the outcomes.