Transformation of Cocoa Farmers' Welfare Through the Implementation of Islamic Pricing in Local Markets

Abstract

ABSTRACT: This study aims to analyze the impact of implementing sharia pricing on the welfare of cocoa farmers in local markets. Before the implementation of sharia pricing, cocoa farmers often faced price instability and market fluctuations that negatively affected their income. This study explores the changes that occurred after the application of a sharia pricing system based on the principles of fairness, transparency, and sustainability. A qualitative approach was used, with data collected through in-depth interviews with cocoa farmers and secondary data analysis from local market reports. The sample characteristics included cocoa farmers from several villages in Indonesia, with data collected over a six-month period. The findings show that the implementation of sharia pricing has significantly improved farmers' economic welfare, providing more stable income and increased access to broader markets. The findings indicate that the sharia pricing system not only provides economic benefits but also supports the sustainability of cocoa production and strengthens farmers' positions within the supply chain. The implications of this study emphasize the importance of further developing more inclusive sharia-based market models to enhance farmers' welfare and local economic sustainability.