Learning from Vegetables and Fruits

Indonesia today is a dynamic nation with plenty of opportunities. While inflation has risen and there has been some instability in the stock market and currency, the country has progressed consistently in the past decade with GDP growth reaching almost 6% annually. Indonesia is now officially the world’s 16th largest economy.

With rapidly urbanising young population, Indonesia is one of the fastest-growing consumer markets in the world. A research by McKinsey & Company found that consumers, totaling about 70 million or almost 30% of the country’s population, are becoming increasingly sophisticated in their spending habits and product choices, including their choices of food. And this number is growing by 5 million per year! In other words, 5 million people, or about the size of Singapore’s population, enter the urban consuming class each year.

The Urban Trend

This type of consumers cares more about health and wellness, highlighting the huge opportunity to serve the increasing necessity for healthy lifestyle. Understanding the needs and emerging attitudes of this consuming class is critical if we want to tap into this opportunity where food and beverages represent 9 of the top 11 fast-moving consumer goods categories. And although “healthy options” are still limited in this country, the future sure looks promising. Several years ago, it was almost impossible to find organic products in Indonesia. Today, more and more organic and healthy produce are available throughout Indonesia, proving that preferences have shifted.

Striving for a healthy planet and communities where everyone can enjoy fresh, tasty and healthy foods, VECO Indonesia realises the potential to take the lead and start innovating in this space. Pushing forward for a healthy food system is one of keys.

A Healthy Food System

A healthy food system does not necessarily consist of all organic food, but certainly must endorse health while promoting social, economic and ecological sustainability. Organic food refers to food products that are 100% free of chemicals as defined by certifying bodies such as USDA and EU. Healthy food is not chemically altered or synthesised in any form but generally still allows the use of internationally listed safe fertilisers and pesticides to a certain level.

Farmers are of course at the heart of every healthy food system. But they are not the only building block. VECO Indonesia has over 30 years of experience working with farmer groups, building their business capacities to position them as entrepreneurs. In the past three years (2014-2016), VECO Indonesia has had considerable success promoting inclusive business and facilitating various cooperation and collaborations between farmer organisations and major buyers, hence shortening the value chain, while focusing on four commodities: rice, coffee, cocoa and cinnamon. However, when it comes to a comprehensive and healthy food system—and in Indonesia, rice and vegetables are the main items—we still have a lot to learn.

In a resilient food system, farmers should not only be linked to major buyers but also to consumers. Ideally, farmers and consumers—not big corporations—should control the food chain. It is therefore very important for farmers to understand the needs of consumers, especially the fast-growing consuming class that demands healthy food. The learning curve is steep and the time to learn is now.

Learning Journey in Arusha

While attending the International Communication Workshop in Arusha, Tanzania on November 1-10, 2016, I had the opportunity to visit farmers and other actors in the vegetables and fruits sector in and around Arusha. Learning from them, the road to a good food system is far from easy. Although fruits and vegetables are now part of important export commodities in Tanzania, feeding their cities with healthy food still proves very challenging.

Items for export must meet a number of standards including quality, acceptable level of chemical residues, packaging and so on. Farmers are required to comply with international voluntary standards for safe and sustainable agricultural products set by GLOBALG.A.P. (GAP stands for Good Agricultural Practices). However, the fruits and vegetables supplied to local Tanzanian markets do not necessarily follow such strict food safety and sustainability requirements, which unfortunately means that most Tanzanians may not always have access to safe and healthy food.

Kelvin Remen, the Policy and Advocacy Manager of TAHA (Tanzania Horticulture Association) explained that Tanzania does have an institution mandated to oversee the quality standards of food and to conduct inspections. “But to tell you the truth, the system is very ineffective,” he said admittedly. “I can harvest my cabbages and take them to the market, and no one would care that I have sprayed the cabbages a day before, because the mechanism in our markets doesn’t capture that,” he added.

As a private organisation famous for a number of successful advocacy work, creating champions within governmental institutions and changing many significant policies, food safety is a critical issue that TAHA is currently working on. Several meetings in Dar es Salaam, involving both private and public sector stakeholders, were organised just to understand that food safety is a problem. But progress is slow. So TAHA has decided to engage a consultant to work on this issue. TAHA plans to present results of the work to the president, which is hoped to lead to a set of crucial decisions.

Incentives and Access to Market

Muvikiho, an apex group (equivalent to a secondary cooperative in Indonesia) with 476 members from 12 fruits and vegetables farmer groups, also shares the same concern but faces different challenges. Established in 2012, Muvikiho exports fruits and vegetables and also supply high-end supermarkets as well as local markets. The organisation handles marketing and management of all contractual agreements. In addition to connecting their members to buyers, they also provide services such as agricultural training and capacity building.

As an apex, Muvikiho must make sure that everything is going well in all the groups. Jeremia Thomas Ayo, the Secretary of Muvikiho, revealed that the organisation practices open management, which is an important key to earn farmers’ confidence. Jeremia said that convincing farmers to apply sustainable agricultural practices was a challenge in the beginning. But once they realised that the markets were interested and there was an incentive of getting better prices, it was not so difficult anymore to recruit members. So better prices and market access are some of the main driving forces for farmers to convert to safer and more sustainable farming habits. Unfortunately, the awareness to provide safe and healthy food has not become one of these forces.

“In theory, all farmers understand the benefits of safe and sustainable farming. But in practice, often if we sent samples, up to 50% were rejected because the level of chemical residues was found too high,” Jeremia explained. At the moment, only three—including Umoja and Kibiu farmer groups—out of the 12 groups are able to meet the GLOBALG.A.P. standards and have managed to secure contracts with Mara Farming, an export company with a strong market base in Europe.

Mara Farming works closely with VECO East Africa to identify the eligibility of farmer groups such as Umoja and Kibiu. According to Eric Mdee, Mara’s Area Coordinator for Tanzania, VECO East Africa has done a great job building the capacity of farmer organisations and connecting them with actors in the value chain. Then Mara takes it from there.

Having worked with smallholder farmers for decades, Mara Farming has always applied inclusive business principles in all of their dealings. Mara develops lasting relationships with farmers and helps them produce crops that meet market demand. They regularly provides farmers with technical assistance including land preparation, input selection, planting, fertilisation program, harvesting and post-harvest handling. Unfortunately, finding a buyer like Mara is not easy. Most buyers are only interested in making one-off purchases and getting quick profits, presenting the sector with yet another big challenge to tackle.

Vietnam Experience

Interestingly, this learning journey has also allowed us not only to draw experiences from the East African farmer groups but also from within VECO. As we sat together and shared experiences, we discovered that VECO Vietnam also works on promoting safe and organic vegetables. Vietnam has a big problem with pesticide residues and a high rate of cancer that many people relate to the food they eat. People don’t trust food anymore to the point that they are eating less and less vegetables.

Just like in East Africa, smallholder Vietnamese farmers face difficulty to access third party certification because it is expensive and the criteria are often too technical and difficult to understand. Therefore VECO Vietnam has developed and is promoting an

innovative Participatory Guarantee System (PGS), a quality assurance mechanism where groups of farmers come together to verify the quality of their vegetables and fruits. Quality checks and field inspections on a particular farmer group are done by other groups of farmers, involving other stakeholders such as consumers, buyers and government representatives. After 8 years working on this system, PGS certification is now fully recognised by the International Foundation for Organic Agricultural Movements (IFOAM). Vietnam is also using PGS as quality assurance mechanism for safe vegetables. Unlike organic produce that are 100% chemical free, safe vegetables have chemicals in them but at levels that are safe for consumption.

Charlotte Flechet, the Communication Officer for VECO Vietnam, explained, “We’ve had some really good results and consumers do trust PGS-certified products because they know that they can be involved. We currently have 28 partner shops that sell safe and organic foods, so if consumers have questions, they can directly answer the questions. It’s much more transparent and very much appreciated by consumers.”

Is Indonesia Ready?

Despite the tough work and all the challenges, Jeremy Thomas Ayo, the Secretary of Muvikiho and also the Chairman of Kibiu, stated that the efforts are well worth it. “There are significant improvements in living standards. Farmers live in good houses now and their children can go to school and obtain higher education, which is the primary objective of Muvikiho. Such visible improvements have also motivated other farmers to join Muvikiho,” he said.

The sector also has a lot to look forward to as it attracts many young farmers to get involved. Both Umoja and Kibiu confirmed this trend. Amani, the Secretary of Umoja, explained that the level of technical understanding required for vegetables farming is too much for older people. But the youths seem to take it as an exciting challenge to get into because it is high paying and they can say to the people, “Hey, I’m doing something technical. Broccoli!”

Taking farmers to modern markets is also important. Paul Mbuthia, the Strategy and Senior Value Chain Advisor for VECO East Africa, even said that he found it so much more effective than any capacity building activity. As we and Peter Chuwa (Chairman of Muvikiho) strolled through the vegetables and fruits section of FoodLovers, a new high-end supermarket in Arusha, we clearly saw that Paul could be right. Seeing rows of neatly organised and properly packaged produce instantly opened Peter’s eyes to what exactly his consumers want—the level of cleanliness, the type of packaging, the presentation, and so on.

So is Indonesia ready to get into the vegetables and fruits sector as one of the first steps to develop a healthy and resilient food system? Learning from East Africa and Vietnam, it may take years to educate farmers about providing consumers with exactly what they want. It may also take years to educate consumers about the right kinds of “healthy food”. It will certainly take years to educate and influence all the actors in the chain. But a journey of a thousand miles always begins with a single step. We now need to decide whether and when we are ready to take that first step.