Bank NTT and VECO Indonesia have signed an agreement to work together to increase the incomes of Flores farmers.
Bank NTT Managing Director Daniel Tagu Dedo and VECO Indonesia Regional Representative Rogier Eijkens signed this agreement on Thursday last week in Bandung, West Java.
The signing took place during the VECO Indonesia Annual Partner Meeting, which this year was held in Bandung.
In this four-page document, the two parties agreed to work together in four areas.
First, provision of financing facilities for farmers under a working capital loan, agricultural investment, and agricultural commodity processing business development scheme that also includes intensification and expansion of coffee, cocoa and rice farmland.
Second, management, financial management and cultivation technology support for these three commodities. Third, support for human resource management in commodity post-harvest processing and marketing. And fourth, development of warehousing and warehouse receipt systems for coffee, cocoa and rice.
On the technical side, Bank NTT as the Regional Development Bank for East Nusa Tenggara will offer a repayment scheme tailored to the needs of farmers. The bank will also publicise the scheme through its network of offices in the VECO Indonesia work area.
VECO Indonesia is an international non-governmental organisation (NGO) that works to promote sustainable agriculture in Indonesia. For more than 25 years, this Belgian-based NGO has worked with small farmers in Flores (East Nusa Tenggara, Jambi, Polewali Mandar (West Sulawesi) and other parts of Indonesia.
The farmers supported by VECO Indonesia farm cocoa, coffee, cinnamon and rice. These farmer organisations and supporting NGOs are in 10 provinces – Jambi, Greater Jakarta, West Java, Central Java, East Java, Bali, East Nusa Tenggara, West Sulawesi, South Sulawesi and Central Sulawesi.
It is for this reason, explained VECO Indonesia Regional Representative Rogier Eijkens, that this agreement was signed in the interests of the farmers in the VECO Indonesia work area. "We can be confident that this partnership will allow farmers in East Nusa Tenggara will easier access to farming business capital," said Rogier.
"This partnership could be a model for bank support for agriculture in other areas," Rogier added.
Bank NTT Director Daniel Tagu Dedo explained that as a regional bank, it has been difficult for Bank NTT to enter the microfinance market, despite wanting to help small and medium enterprises, including farming businesses. "We are delighted that there are VECO Indonesia partners that can open the door to farming businesses, especially in Flores," said Daniel.
"We want to see the scale of agriculture and estates in Flores to expand as a result of this partnership," he added. Daniel believes that the bank's business loan scheme for farmers will make it easier for farmers to market their products.
"So we'll see Bajawa coffee in the shopping malls in Jakarta. Village potentials must be developed, so that the cities depend on the villages," he explained.
As a next step in this partnership, farmers will be able to access working capital for their farming businesses. Farmers in Flores are delighted at the prospect.
Nobertus Temung, a coffee farmer in Manggarai district, East Nusa Tenggara said he was pleased about this partnership. Nobertus is a member of the organic coffee farmer organisation Asosiasi Petani Kopi Organik Manggarai (Asnikom), a VECO Indonesia partner in Flores.
Asnikom Secretary Nobertus explained that the association had insufficient cash flow to buy coffee from the farmers. "Because of that, we weren't able to buy all the coffee that farmers in our area produce, and they had no choice to but sell to middlemen."
Asnikom needs IDR 160 million of working capital every six months to buy the farmers' coffee, said Nobertus. "With this partnership between VECO Indonesia and Bank NTT, we hope it will be easier for us to access working capital."