Technological innovation adoption for improving smallholder cashew farmers’ income: The interconnection of institutional and market dimensions

Cashews are a critical export commodity of African and other developing countries, including Indonesia. Unfortunately, Indonesia’s exports continue to decline due to decreased production and low productivity. The science-technology-innovation approach plays a crucial role in fostering a more sustainable food system, as well as the cashew industry. The research aims to analyze the nexus between institutions and the market in shaping perceptions of cashew technology, technology adoption, and farmers’ revenue. A mixed-method, quantitative and qualitative design was applied through a structured questionnaire survey of 188 smallholder cashew farmers and in-depth interviews with key actors. Data were processed using the Partial Least Squares Structural Equation Model (PLS-SEM) and evaluated through the outer and inner models. The crucial findings show that market conditions directly improve farmers’ perceptions of cashew technologies. Market variables and farmers’ perceptions significantly increase technology adoption and, in turn, improve farmers’ revenue, whereas institutions play a negligible role. Based on these critical findings, the recommended policies should focus on improving market and farmers’ perception by building a competitive production centre market and strengthening extension services. To ensure sustainable cashew farming, all actors should collaborate to accelerate the adoption of cashew farming technologies.