Digital Transformation of Livestock Farming Through Financial Technology: Reducing Dependence on Middlemen for Socio-Economic and Environmental Sustainability
DOI:
https://doi.org/10.22500/14202671761Keywords:
Digital Transformation, Disintermediation, Financial technology, Livestock FarmingAbstract
Livestock farmers in Indonesia often rely on middlemen for financing, price information, and market access, creating structural dependence and weakening their bargaining position. In this context, digital transformation through financial technology has emerged as a potential mechanism for reducing dependence on intermediaries and promoting more inclusive livestock market relations. This study aims to analyze the role of financial technology in driving the digital transformation of the livestock sector in Indonesia, particularly in reducing farmers’ dependence on middlemen and examining its implications for socio-economic and environmental sustainability. Employing an exploratory qualitative approach with an intrinsic case study design, this research was conducted in the livestock center region of East Java Province. Data were collected through semi-structured interviews, participatory observation, and documentary study, and subsequently analyzed using thematic analysis. The findings indicate that Financial Technology expands farmers' access to financing and markets, enhances transaction transparency, and promotes partial disintermediation within the livestock value chain. Socio-economic impacts are evident in increased income, operational efficiency, and financial inclusion among farmers. While environmental considerations are not yet a primary motivation for adoption, Financial Technology holds the potential to support sustainability through distribution efficiency and waste reduction. This study affirms that financial technology functions as an instrument of social and economic transformation within the rural livestock sector. Farmer behavior undergoes a gradual transformation due to their enhanced capacity for direct market access, improved financial transparency, and reduced structural dependence on intermediaries. This shift strengthens farmers' agency over price setting, cash flow management, and production decisions. Consequently, the role of intermediaries evolves from price-determining actors to logistical or coordinating partners. This transformation highlights digitalization as a catalyst for adaptive change.
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