An export tax was introduced on Indonesian cocoa beans in 2010 to guarantee domestic supply for processing. This reduced cocoa bean exports by 51.4 per cent and increased processed cocoa exports by between 11.3 and 224 per cent. To assess the impact of this export tax on cocoa farmers and the supply chain, surveys were conducted with 60 farmers in South Sulawesi and various supply chain participants. A qualitative approach was used to analyse the cocoa supply chain from farmers to exporters or processors, and quantitative analysis for analysing the marketing system, efficiency analysis and price linkage. Results indicate that farmers' price is determined by the international price due to their higher bargaining power. It is the exporter that has a reduced margin or price differential following increased processing capacity and competition between exporters and processors for available beans. The study identified three marketing channels: farmers selling wet cocoa beans for cocoa processing; farmer's groups fermenting cocoa beans and then selling as providing the highest return to farmers; and farmer's selling dried beans to local traders.
Cashew is an increasingly important export commodity for Indonesia. In this article, the authors use data obtained from primary and secondary sources to examine the competitiveness and efficiency of monoculture and intercropping systems of cashew production in West Nusa Tenggara province, and the likely impacts of selected scenarios of anticipated policy changes on the competitiveness of these two systems. This research uses the Policy Analysis Matrix as a data analysis tool. The research shows that both cashew systems are strongly competitive and efficient in resource use due to generation of high positive private and social profits. On this basis, the authors propose that policy makers consider the expansion of cashew plantations as one of the best options to improve smallholders' incomes, particularly smallholders living in dry land areas. They further suggest that emphasis should be placed on expanding the intercropping cashew system, given that intercropping cashews with corn leads to higher productivity of cashews and significantly higher private and social profits for cashew farmers.
This paper presents the experiences of using farmer participatory research to develop and transfer cassava production technologies to maintain soil productivity, reduce erosion and increase farmers' incomes. The research was conducted over a five year period in two districts of East Java: Blitar and Malang. A Rapid Rural Appraisal was initially used, in which farmers identified problems and proposed potential solutions. The results demonstrate that farmers understood low crop productivity was partly due to improper land management and they knew how to implement soil conservation practices. However, they did not adopt the technology properly because it was too costly and complicated. When farmers became aware that this was not the case, they developed demonstration plots to test some of the technologies, including erosion control practices, fertilizer application and the introduction of new cassava varieties. During the course of the project, the number of farmers adopting the soil conservation practices in their own fields significantly increased. The study found that the farmer participatory research approach increased the self-confidence of farmers, motivated them to actively obtain new knowledge about technologies and increased their willingness and ability to try them.
This report presents findings from a project aiming to help smallholder farmers improve cattle production in eastern Indonesia by introducing forages into their cropping systems. It identified several factors constraining livestock production in smallholder farming systems, and found that most technologies needed to address the constraints are already available in Indonesia or elsewhere, but have not yet been adopted by local farmers. The report describes the merits of combining the principles and tools of farming systems analysis and farmer participation, where an extensive benchmarking process to identify constraints to livestock production and potential strategies to address them are shared with farmers to develop a shortlist of feasible strategies for on-farm trialling. Based on feedback from farmers and results from monitoring on-farm trials the approach was deemed successful. The pathways to adoption of livestock improvement strategies varied by region and technology. The initial focus was to address forage supply and quality constraints through modest plantings of selected forages. The confidence and trust arising from successful adoption of this comparatively simple technology was used as an entry point for more complex animal management strategies requiring long-term planning and investment.
This study identifies sustainability and competitiveness issues in the value chains of the following key Indonesian export commodities; cocoa, coffee, mango, cashew, tea and rubber. Methodology included desk top analysis and interviews with development and research stakeholders. Each commodity is described in a separate section and includes discussion of the issues relating to sustainability and competitiveness and opportunities to address these. The report highlights specific issues unique to each commodity and generic issues such as low smallholder productivity and access to improved farming practices and technology through to inefficient value chains and challenges in complying with national sustainability policy and international corporate environmental governance. The authors summarise the current policy and operating environment and provide policy recommendations to improve sustainability and competitiveness of these value chains into the future. These include: integrated horticulture development in upland areas for mango; farm production and added value creation for cashew; combining clonal based development and forest protection in rubber; revitalisation of the tea production and marketing system; expanding cocoa somatic embryogenesis technology seedling and sustainability based certification; and improving the mechanism of coffee certification schemes.
This report describes a collaboration between the NGO VECO, the leading global cocoa supplier Armajaro, and West Sulawesi farmers to develop direct market linkages and build on previous development work. The report briefly outlines the cocoa industry and the local cocoa chain and identifies key partners, their roles and activities. Testimonials from stakeholders provide comment on the process, benefits and challenges of the program. Benefits to farmers include improved production (up to 750kg/ha compared with an average of 500kg/ha, but potential for significant growth up to 2000kg/ha), better prices and income, terms and access to market and quality information. Sixty-seven farmer groups have qualified for UTZ certification providing another market opportunity. The report illustrates that collaborative programs can facilitate opportunities for traceability, production and quality improvements and that collective selling is a viable income source for organised farmer groups with improved productivity and quality. The report highlights the need for farmer organisations to become stronger and more organised at national and local levels to improve their bargaining capacity.