Permata Bajawa's Collective Coffee Marketing

Permata Bajawa's Collective Coffee Marketing


From 2008, the program strategy of VECO Indonesia and its partners focused on sustainable agriculture chain development. The focus in Flores is three-fold: the coffee chains in Manggarai, Ngada and Ende; the rice chain in Mbay, Nagekeo; and the cocoa chains in Ende, Sikka and East Flores.

As well as increasing production, the program focused on post-harvest management and marketing. But because the farmers produced poor quality commodities, they were receiving low prices for them. The farmers were also selling their commodities individually in small volumes.

The focus of this strategy started to change in 2011. But changing old habits needs time and strategy. This is what farmer organisations (FO) that are VECO Indonesia partners have been trying to do, together with NGO partners acting as consultants. This strategy aims to give the farmers control over their commodities and enable them to negotiate fair prices.

Collective marketing will put farmers in the position to set prices for their commodities. Also, traders will no longer underestimate the farmers.

This strategy bore fruit in 2014 when members of farmer groups started getting together and selling their coffee collectively. The coffee they sell is not local quality but premium quality coffee that has been properly processed post harvest.

Thanks to all its hard work this year, Perkumpulan Masyarakat Watuata (Permata) Ngada is now collectively selling coffee to coffee exporter Indocom. Permata has been working with coffee processing units supported by the Ngada district agriculture, estates and fisheries agency since 2005.

Through its processing units, Permata has been producing export quality coffee. As of 10 July 2013, they had sold 1,844 litres of wet unpeeled coffee, or the equivalent of 5,179 tons of coffee beans.

Permata has 13 processing units, although only nine are operating so far. They are located across two subdistricts of Ngada district – Bajawa and Golewa.

Permata receives IDR 11,750 per litre for its coffee, which is a fairly high price. Between 1.6 kg and 2 kg of red cherries makes one litre of wet unpeeled coffee. Price margin analysis reveals that at this price, Permata and farmer members get a profit of IDR 3,750 per litre.

The coffee is collected from the members before eventually being sold to the exporter.

Group members process their coffee at a household level. Quality control officers ensure that the quality is up to standard. The coffee is then collected by Indokom from the groups on the pick-up day. The processing units also buy coffee from farmers who are not group members and it is processed the groups collectively.

To differentiate the coffee from the individual farmers and groups, each sack is marked with the farmer's code and initials. This is done so that any coffee that is does not meet the quality standards can be returned to the farmer who produced it.

With one month's experience of collective marketing under their belt, opinions are many and varied. "It turns out that the farmers and the groups that are Permata members can produce excellent quality coffee and compete with the government-run processing units that have been operating for almost nine years," said the Ngada district head of estates.

"If it really is this easy to get fair prices, why haven't we always done it, and why don't the others want to do it?" said one Permata member.

This experience is expected to encourage other farmers to organise and sell premium quality coffee collectively. That way, the dream of farmers having control over their commodities can come true. [Fransiska Rengo, Coffee Chain Field Officer in Flores]