Building a sustainable organic rice marketing chain in Boyolali

Building a sustainable organic rice marketing chain in Boyolali


As the staple food for the people of Indonesia, rice is also a key commodity for farmers in Indonesia, including in Boyolali district, Central Java. In this upland area, farmers grow organic rice for their own needs and for sale. However, the farmers do face challenges, such as limited market access and limited availability of organic rice.

Together with a local ngo, Lembaga Studi Kemasyarakatan dan Bina Bakat (LSKBB) in Solo, VECO Indonesia supports farmers in Boyolali district since 2008. The programme goal is to increase organic rice production and build a sustainable marketing chain, from farmer to consumer. Four approaches are adopted towards achieving this goal: building an organic rice production system, establishing a marketing chain with buyers, educating consumers about healthy food, and advocating public policy that supports sustainable agriculture.

The programme targets are farmers, farmer organisations, private actors, consumers and local government.

Approach I: building an organic rice production system

Intensive intervention by LSKBB and VECO Indonesia is undertaken to get farmers to switch from non-organic to organic rice production. Farmers are encouraged to use natural inputs, including seed, water, and organic fertiliser and pesticide. As a result, most farmers, particularly in upland areas that have water sources, have switched to organic farming practices. The farmers also organised themselves through a farmer organisation called Asosiasi Petani Padi Organik Boyolali (APPOLI). And they have adopted an internal control system. They get better prices for their products, and as a result the membership keeps growing. In 2009, for example, the number of farmers using organic farming practices grew by around 16%, from 1,495 to 1,849. In one village, on 65 hectares of land belonging to 96 farmers, 80% have switched to organic farming practices.

Approach II: establishing marketing chains with buyers

Other support provided includes mediation with private actors. VECO Indonesia and LSKBB work together to facilitate farmers teaming up with private actors to secure guaranteed markets. This marketing is done, among others through cooperatives and private actors and directly to consumers. One commercial buyer is PT Swasembada Organic (SBO), supplier of organic rice to Kentucky Fried Chicken. This organic product is also sold to cities including Solo, Jakarta, Yogyakarta, and Bandung. They now have so many orders, the farmers now can't meet the demand. Through these partnerships, farmers also get support from private actors, including seed and fertiliser, as well as technical training in product quality standardisation.

Approach III: educating consumes about healthy food

The consumer awareness program is implemented because there are so many links in the agriculture produce distribution chain from farmer to consumer, including individual farmers, middlemen, large traders, large retailers, small retailers and finally, consumers. As a result, farmers receive very low prices and the quality of the product suffers. VECO Indonesia works with Konsorsium Solo Raya or the Solo Consortium, which comprises three VECO partners in Solo, to facilitate face to face meetings between farmer organisations and consumer groups. On the consumer side, strengthening involves campaigns targeting housewives, government and education institutes.

Consumer groups visit locations where organic agricultural products are produced. They see for themselves the production process, water sources, and post-harvest processing of the rice. This builds the consumers’ knowledge of organic products. Consumer groups have sprung up in several locations. Consumer demand for organic rice has also increased. At the same time, the marketing chain is shortened, as the farmers sell direct to consumers.

Approach IV: advocating public policy that supports sustainable agriculture

To secure support from government, LSKBB and VECO Indonesia advocate for public policy that supports sustainable agriculture. VECO Indonesia and LSKBB negotiate with local government and local parliament. As a result, the budget for agriculture has increased from only around IDR 2 billion a year, to IDR 6 million a year. Also, in the past the lion’s share of the budget was earmarked for production inputs, such as fertiliser and seed, but now, there is an allocation for marketing and post-harvest processing equipment. Today, farmers have easier access to capital from government banks.

Lessons learned

Several lessons have been learned from the organic rice marketing chain development programme in Boyolali. First, farmers will switch to organic farming practices if they profit from this change. Farmers in Boyolali, despite a decrease in yields after switching to organic farming, get better prices and found a good market for their products. Second, through farmer organisations, farmers can get higher prices because they have a stronger negotiating position than they did before they became members. Third, building direct links between farmers and consumers shortens the marketing chain and builds consumer trust in the farmers