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Un-structured problems of shallots are a result of asymmetric information along the supply chain. In recent years, shallot is strategic horticultural commodities with high price fluctuation and contributes to instability of the regional economic development. This study was conducted in Brebes District of Central Java, the biggest production centre for shallot in Indonesia. This study was used an agro-industry cluster development initiated by Bank Indonesia (BI). The main objective of this study was to describe the unstructured or ill-structure problematic situation, then formulate a strategic assumption in the development of agro-industrial cluster of shallot often involving behavioural variable and, should not addressed by hard methodologies. We proposed a solution in order solve the problems above and as a reference through the inductive process with the application of a methodological approach called Soft System Methodology (SSM). The result of the SSM is capabilities to organize consensus among the stakeholders in the scope of agro-industrial cluster of shallot by SSM as qualitative method which was combined with Interpretative Structural Modelling (ISM) also produce design functional improvement of farmers’ institution.

The shallot agro-industrial cluster based on regional characteristic with soft system methodology approach: A conceptual design