Building Indonesia’s Food Security through Public Private Partnership
The Partnership for Indonesia’s Sustainable Agriculture (PISAgro) is a collaborative platform between the Indonesian government, public and the private sector to support the Government of Indonesia’s ambition to increase agriculture productivity sustainably as part of the country’s effort to develop food security.
PISAgro was founded in June 2011 at the World Economic Forum on East Asia in Jakarta and was officially operational in 2012. The partnership is fully supported by the Coordinating Ministry for Economy, Ministry of Agriculture and Ministry of Trade.
PISAgro 2020 Visions are:
- 20% increase in the production of selected commodities (rice, soybean, corn, palm oil, coffee, cocoa, potatoes, horticulture, dairy, rubber, beef cattle),
- 20% increase in the welfare of farmers,
- 20% reduction in greenhouse gas emissions
PISAgro includes number of domestic and multinational companies, non-governmental organizations (NGOs) and international organizations.The full list of PISAgro members is available at www.pisagro.org
Commodities were selected based on their potential to contribute to a sustainable economy and improve the welfare of the population, particularly in rural areas.
PISAgro approaches are:
- Practical: direct involvement and working closely with farmers;
- Holistic: Works along the supply chain from seed to land and from land to markets in collaboration with industry and public sector;
- Modular: build models and tested practice; and
- Scalable: able to be replicated to a larger scale.
|Farmland||67,000 Ha||352,000 Ha||2,000,000 Ha|
PISAgro is currently looking for breakthrough programmes to achieve the 2020 vision. One such programme is the Innovative Value Chain Schemes providing farmers with access to affordable finance and support.
Innovative Value Chain Schemes
The Indonesian Chamber of Commerce (KADIN), together with PISAgro and in cooperation with the Indonesian Economists Association (ISEI), hope to address one of the main challenges facing farmers: how the working groups in partnership with financial instituions disburse micro and small business loans (KUR – Kredit Usaha Rakyat) through cooperatives in order to improve farmer’s productivity and sustainable production.
The schemes take a holistic approach providing not only necessary finance but also:
- High-quality seeds and fertilisers,
- Knowledge, guidance on estate management and training in good agronomy practices,
- Farmers empowerment in financial management of their harvests, supported by information technology through branchless banking
- Compensation payments during the harvest waiting period,
- Guarantee of purchase of crops by an offtaker company,
- Assistance in land ownership certification through farmers’ cooperatives and supported by plantation companies as guarantors, and
- Working together with civil society organisations to get financial literacy training and mentoring
The schemes require the establishment of farmer cooperatives to manage all activities from the purchase of seeds, fertiliser, training, post-harvest and financial management.
Farmers benefit from increased productivity – yields can double – as well as access to markets for their crops. They can also access affordable loans and are able to manage their finances better. This all contributes to improved livelihoods and welfare.
Stories from Farmers joining Innovative Value Chain Schemes
1. Corn Working Group
Patrons: Syngenta (Nur Iman Afandi -Agronomist)
Origin: Bima, West Nusa Tenggara
Area of farmers group: 24 hectares
|Farmland area||1.5 ha||2 ha|
|Production||8 ton/ ha||8.5 ton/ha|
|Income||Rp 6,400,000 (net)||Rp 17,500,000 (net)|
- Climate and unpredictable weather during the growing season 2015/2016
- Erratic weather contributed to less than optimal fertilisation and pest attacks
- Access and cost of labor
- Stability of corn price and access to market,
- Availability of agricultural insurance,
- Mentoring and assistance from PISAgro (i.e.: on-farm and financial management)
- Additional loan capacity for farmers group to access machinery for on-farm and post harvest.
2. Palm Oil Working Group
Name: (Mr.) M. Helmi
Patrons: PT SMART Tbk (Sinar Mas)
Location: Village Petapahan, district. Tapung, Kab. Kampar, Riau
|Farmland area||2,5 ha||2,5 ha|
|Production||12 ton FFB/ha/year||25 ton FFB/ha/year|
|Income||1,5 million/month/ ha||3 million/month/ ha|
- Very low yields due to unclear source of seed inputs; lack of Good Agriculture Practices (GAP) to cultivate farm; lack of funds to replant palm oil trees.
- Independent smallholder farmers have low productivity and many own inherited debts
- After following the Innovative Financing program, palm oil farmers in the village hope to:
- Use certified quality seeds
- Be trained on GAP and sustainability by PT SMART – Sinar Mas
- Have market price certainty on harvest with FFB (Fresh Fruit Bunch) pricing from the provincial office of agriculture.
- Receive Rp 500 thousand/month/ha for 48 months; and also be able to work in the field and receive extra pay.
- Have the government to continue implementing the Innovative Financing as part of the Innovative Value Chain Schemes with a sufficient grace period and tenure to support palm oil replanting.
3. Coffee Working Group
Name: (Mr.) Fery Alphison
Origin: Mount Megang, Lampung
|Farmland area||3 ha||3 ha|
|Production||1,4 ton/ha||1,5 ton/ha|
- Farmers do not have the confidence to replant their crops to improve their productivity
- Farmers need an extra income from their coffee plantations
- Develop farmer’s cooperatives by providing fertiliser or certain loans to improve productivity
4. Cocoa Working Group
Name: (Mr.) Herman
Origin: Village Ulidang, Waigamo, Majene, West Sulawesi
|Farmland area||2 ha||2,5 ha|
|Production||517 kg/ha/year from 1600 trees||350 kg/ha/year dari 700 trees. Numbers of trees are reduced to severe drought.|
|Income||–||Rp 7,000,000 from 700 trees|
- Lack of knowledge financial management. The less efficient management of the revenue is due to the lack of good financial management
- Pests attack on cocoa plantations. With the knowledge gained from Nestlé and Swisscontact Field School, famers applied organic pesticides from a mix of goat urine, ginger and lemongrass leaves or infected areas.
- Increasing production during prolonged drought. This farmer plans to borrow 15 million IDR from the bank to increase the productivity of his plantation through the purchase of machinery and fertilizers.
- Expand the coverage of the Nestlé cocoa and Swisscontact cocoa partnership programme to reach more farmers in Majene because the program is very helpful.
- Government continue assistance in the provision of fertilizers.
- Promote the cocoa and goat farming integration programme.